No Russian oil: "Steep learning curve" for PCK refinery

Energy - No Russian oil: "Steep learning curve" for PCK refinery

The PCK oil refinery is back in business - this is how Managing Director Ralf Schairer described the situation in the summer. At the beginning of 2024, the company in north-eastern Brandenburg had gone a year without Russian oil. The great uncertainty has subsided, the plant is operating stably with alternative oil sources despite Russia sanctions and there have been no fuel shortages at filling stations.

"There is a steep learning curve behind the refinery," PCK CEO Schairer told the German Press Agency. "We want to make ourselves even more robust in 2024."

However, key questions about securing the future of the refinery remain unresolved. The dispute between the federal government and Rosneft as majority owner under trustee management is also likely to continue in 2024 - possibly also before the Federal Constitutional Court.

When will the go-ahead be given for pipeline expansion?

PCK boss Schairer had hoped for the EU Commission 's approval for 400 million euros in state aid by Christmas. However, approval from Brussels was still pending shortly before the end of the year. A decision in 2024 would have an impact on the timetable, said PCK CEO Schairer. In order to be able to make technological adjustments to the refinery processes, rapid approval from the EU Commission is necessary. However, Schairer also admits that the funding application is uncharted territory.

A central supply artery, so to speak - the oil pipeline from Rostock to Schwedt - is to be upgraded with the help of the funding and the refinery technologically adapted to process new types of oil. The pipeline was never intended for continuous operation, but has been necessary since the oil embargo against Russia and the halt to the Druzhba pipeline. The Federal Ministry for Economic Affairs announced that it is in constant contact with the EU Commission, which must examine the aid to the private company.

Could the dispute over the federal budget for 2024 also pose a threat to the project? The Ministry of Economic Affairs told dpa that the subsidies are currently still in the budget freeze until the new budget has been decided. At the same time, the Ministry emphasized that the German government stands by its support for the supply and transformation of the PCK.

At the end of November, Brandenburg's Minister President Dietmar Woidke (SPD) saw risks for part of the funding for the conversion of the PCK refinery. Schwedt's mayor Annekathrin Hoppe (SPD) also appealed to the federal government: "We have fulfilled our promises. Fulfill your promises too."

Trust administration continues - and what comes next?

It is still unclear what a future ownership structure for the refinery without Russian influence will look like. The federal government entered uncharted legal territory when it took over the trusteeship of the German subsidiaries of the Russian Rosneft Group.

PCK is thus under the control of the federal government - for the time being until March. However, Rosneft is appealing against this before the Federal Administrative Court. In December, the company also filed a constitutional complaint with the Federal Constitutional Court against the trusteeship, according to the Berlin law firm Malmendier Legal.

However, a decision on a new shareholder has already been made: The energy giant Shell wants to sell its 37.5 percent stake in the refinery to the British Prax Group. However, the deal has not yet been finalized, partly due to the pre-emptive rights of the other shareholders.

Realignment planned for hydrogen production

In 2024, the refinery wants to push ahead with the planned reorientation away from oil. The plan is to produce green hydrogen in a few years' time, which PCK will later use to produce synthetic fuels, for example for aircraft. So far, a feasibility study has been carried out, and the financing of planned projects will be discussed in the coming year. "2024 will be an exciting year. We want to make the final investment decision," said Schairer. A switch to synthetic fuels is conceivable by the end of the decade at the earliest.

The city of Schwedt, which once had to cope with a large population decline, also wants to use millions in funding to drive forward the transition to climate-neutral industry in 2024. The aim is to attract new companies and more skilled workers. A "future workshop" is to bring politics, business and young people together, as Mayor Hoppe announced. Start-ups are to set up in a new transformation and service center and an innovation campus is to be created. "We have set out on our journey," said Hoppe on the structural change in the industrial region.