Moscow’s energy stand-off with its European neighbours has turned the spotlight on two Russian-owned oil refineries in Germany and Italy that are complicating Europe’s efforts to purge Russian fuel from its power grid.
With Chancellor Olaf Scholz saying on Thursday that Germany could "only speculate" whether Russia would cut off fuel exports, a refinery at Schwedt near the Polish border is seen as a weak link in Germany's oil supplies because Russian company Rosneft is the majority shareholder.
“If I call them up and ask them what they’re doing to become independent of Russian energy, they won’t even pick up the phone,” said German Economy Minister Robert Habeck.
In Italy, Russian company Lukoil is the sole shareholder of the ISAB refinery in Sicily, which produces diesel, gasoline and other fuel products and employs hundreds of people.
But Europe’s scramble to rid itself of Russian energy, in order to stop financing the assault on Ukraine and remove a geopolitical weapon from the Kremlin’s hands, has led to suggestions that both plants could be nationalised.
Germany opened the door to that possibility this week when Mr Scholz's ruling coalition proposed legal changes which would allow critical infrastructure to be seized by the government.
Mr Habeck, who said it was hard to understand in hindsight how Rosneft had been allowed to control 54 per cent of Schwedt’s shares, did not commit to taking it over but said ministers were preparing for “all imaginable scenarios”.
He said preparations were being made with Poland, which is partly supplied by the plant in the former East Germany, for “the event that Rosneft is no longer the operator of the refinery”.
This could include replacing Russian oil imports, which come to Schwedt through the Druzhba pipeline, with shipments from elsewhere via the Baltic port of Rostock. Mr Scholz said on Thursday that Germany "has to prepare" for the possibility of Moscow turning off the tap.
Rosneft is a sore subject for Germany because its former chancellor, Gerhard Schroeder, is a member of the oil company’s board and has frequently caused embarrassment in Berlin with Kremlin-friendly remarks.
Mr Schroeder and his successor Angela Merkel are now blamed for letting Germany become dependent on Russian imports for coal, oil and gas. It is unwilling to stop them immediately for fear of economic chaos.
But other oil shipments down the Rhine in western Germany have already been replaced, and a second French-owned refinery in the east is in the process of replacing its Russian contracts, meaning Germany’s reliance on Russian oil has fallen by about two thirds since the invasion.
This means an oil embargo would no longer be a “national economic catastrophe”, said Mr Habeck, although it could still lead to local power disruptions and a spike in already alarmingly high fuel prices.
The European Union, urged on by members including Poland, has agreed an embargo on coal and is discussing a potential ban on oil, but has not found consensus on the gas imports it most relies on.
The situation was given greater urgency on Wednesday when Russian gas supplier Gazprom cut off exports to Poland and Bulgaria for refusing to pay for it with roubles, a demand made by the Kremlin which western powers say is a breach of contract.
Despite the scramble for alternatives, a tracking group, the Centre for Research on Energy and Clean Air, said on Thursday that the EU had sent 46.6 billion euros ($49.1bn) in energy payments to Russia during the two-month war in Ukraine.
Germany provided 9.1bn euros of this, making it the largest European importer, followed by Italy with 6.9bn. A quarter of Russian imports arrived at the ports of Rotterdam, Maasvlakte, Trieste, Gdansk and Zeebrugge.
Italy, like Germany, is trying to diversify its power supply with gas deliveries from outside Russia and investments in renewable energy, but the future of the Lukoil refinery in Sicily remains uncertain.
A spokesman for Minister of Economic Development Giancarlo Giorgetti told Reuters that the ministry was examining the situation, but that there was “concern about the social implications for the area” if Russian oil is stopped.
At least 1,000 people work at the ISAB plant and the three jetties that handle oil imports, and Lukoil may be unable to source oil from elsewhere because lenders are unwilling to provide it with funds.
Diego Bivona, the head of an industry lobby group in Sicily, has cautioned against what he described as the “demonisation of anything attributable to Russia” in the multiple rounds of sanctions imposed by the EU.
Although Lukoil has distanced itself from what it called the “tragic events” in Ukraine, its president Vagit Alekperov last week resigned after being hit with western sanctions.
Mr Alekperov, worth an estimated $22.5bn, was sanctioned by Britain in a sweep of 206 oligarchs, Kremlin-friendly figures and separatists in breakaway regions of Ukraine.
The research centre’s report on Thursday, written by analysts Lauri Myllyvirta and Hubert Thieriot, said the EU’s measures so far were not cutting Russian revenue because increasing fuel prices were offsetting lower volumes.
“Europe’s desire to keep the door open to fossil fuel shipments and payments for them has prevented more comprehensive sanctions on Russian banks, financial institutions and trade,” the analysts said. “It's time to stop supporting Putin's war crimes.”
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
What drives subscription retailing?
Once the domain of newspaper home deliveries, subscription model retailing has combined with e-commerce to permeate myriad products and services.
The concept has grown tremendously around the world and is forecast to thrive further, according to UnivDatos Market Insights’ report on recent and predicted trends in the sector.
The global subscription e-commerce market was valued at $13.2 billion (Dh48.5bn) in 2018. It is forecast to touch $478.2bn in 2025, and include the entertainment, fitness, food, cosmetics, baby care and fashion sectors.
The report says subscription-based services currently constitute “a small trend within e-commerce”. The US hosts almost 70 per cent of recurring plan firms, including leaders Dollar Shave Club, Hello Fresh and Netflix. Walmart and Sephora are among longer established retailers entering the space.
UnivDatos cites younger and affluent urbanites as prime subscription targets, with women currently the largest share of end-users.
That’s expected to remain unchanged until 2025, when women will represent a $246.6bn market share, owing to increasing numbers of start-ups targeting women.
Personal care and beauty occupy the largest chunk of the worldwide subscription e-commerce market, with changing lifestyles, work schedules, customisation and convenience among the chief future drivers.
Who is Tim-Berners Lee?
Sir Tim Berners-Lee was born in London in a household of mathematicians and computer scientists. Both his mother, Mary Lee, and father, Conway, were early computer scientists who worked on the Ferranti 1 - the world's first commercially-available, general purpose digital computer. Sir Tim studied Physics at the University of Oxford and held a series of roles developing code and building software before moving to Switzerland to work for Cern, the European Particle Physics laboratory. He developed the worldwide web code as a side project in 1989 as a global information-sharing system. After releasing the first web code in 1991, Cern made it open and free for all to use. Sir Tim now campaigns for initiatives to make sure the web remains open and accessible to all.
More from Rashmee Roshan Lall
Killing of Qassem Suleimani
From Europe to the Middle East, economic success brings wealth - and lifestyle diseases
A rise in obesity figures and the need for more public spending is a familiar trend in the developing world as western lifestyles are adopted.
One in five deaths around the world is now caused by bad diet, with obesity the fastest growing global risk. A high body mass index is also the top cause of metabolic diseases relating to death and disability in Kuwait, Qatar and Oman – and second on the list in Bahrain.
In Britain, heart disease, lung cancer and Alzheimer’s remain among the leading causes of death, and people there are spending more time suffering from health problems.
The UK is expected to spend $421.4 billion on healthcare by 2040, up from $239.3 billion in 2014.
And development assistance for health is talking about the financial aid given to governments to support social, environmental development of developing countries.
Profile
Company name: Marefa Digital
Based: Dubai Multi Commodities Centre
Number of employees: seven
Sector: e-learning
Funding stage: Pre-seed funding of Dh1.5m in 2017 and an initial seed round of Dh2m in 2019
Investors: Friends and family
More from UAE Human Development Report:
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
How to increase your savings
- Have a plan for your savings.
- Decide on your emergency fund target and once that's achieved, assign your savings to another financial goal such as saving for a house or investing for retirement.
- Decide on a financial goal that is important to you and put your savings to work for you.
- It's important to have a purpose for your savings as it helps to keep you motivated to continue while also reducing the temptation to spend your savings.
- Carol Glynn, founder of Conscious Finance Coaching
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
