Rosneft Beefing up German Refinery Holdings
Plans unveiled last year by BP of the UK and Russian oil conglomerate Rosneft to reshuffle their shareholdings in the German refinery sector have now been approved by the boards of both oil and petrochemical groups as well as the German antitrust authority Bundeskartellamt. Following the expected approval by the European Commission at the end of the first quarter, the two companies will begin implementing the restructuring scheme, which calls for BP to take full control of the 50:50 joint venture Ruhr Oel, with its refinery at Gelsenkirchen, Germany, and for Rosneft to increase its shareholdings in other German refineries.
The Russian group will become a direct shareholder and increase its stake in the Bayernoil refinery at Vohburg from 12.5% to 25% and widen its interest in the refinery Mineraloelraffinerie Oberrhein at Karlsruhe from 12% to 24%. Together with its purchase of a share packaging from Total, its stake in PCK Raffinerie in Schwedt will rise from 35.42% to 54.17%.
For Rosneft, the agreement with BP is part of a drive to expand beyond the current Russian sphere of influence toward what it said last year described as a shift to a “fundamentally new level of operations in Western Europe.”
The oil producer also is staking a claim in China, in 2015 signing a memorandum of understanding to acquire a 30% stake in ChemChina. Meanwhile, employees of BP are facing an uncertain future. Group management has confirmed the loss of UK jobs – about 20% of the related workforce – as it downsizes its North Sea operations.
“We need to take specific steps to ensure our business remains competitive and robust,” Mark Thomas, BP’s regional president, said. He added that “the inevitable outcome will be a reduction of around 600 staff and agency contractor roles by the end of 2017, with the majority of these taking place this year.”
BP said a breakdown of where the cuts would take place would be available after a consultation process, which began last week. The trade unions said they would try to change management’s mind.