Crude awakening: the German town on the front line of Russian sanctions


Ursula Patz opposes Russia’s warfare on Ukraine. But she can be firmly towards anti-Moscow sanctions that she says will imperil her town.

“Sanctions that end up hurting you more make no sense,” the 76-year-old mentioned. An oil embargo “won’t harm Russia — they’ll just sell the oil to someone else”.

Patz labored for 16 years at an oil refinery in the north-east German town of Schwedt that dangers turning into collateral harm in Europe’s marketing campaign of punitive measures towards Russia.

At problem is the EU’s ban on imports of Russian oil, which is designed to deprive President Vladimir Putin of revenues to fund his warfare in Ukraine. The measure, which comes into power on January 1, has broad help in Germany however has thrown the future of Schwedt’s refinery into doubt.

“People here feel they are a pawn that is being sacrificed in some game,” mentioned Jens Koeppen, a Christian Democrat MP who represents the town.

Former refinery employee Ursula Patz says the sanctions ‘won’t hurt Russia’ © Hannes Jung/FT

Schwedt’s PCK refinery, which employs about 1,200 people
Schwedt’s PCK refinery, which employs about 1,200 folks © Hannes Jung/FT

At problem is the refinery’s reliance on Russian oil. It sits atop the “Druzhba” pipeline, which carries crude some 4,000km from Almetyevsk in central Russia on to Schwedt. And the plant is configured to work with Russia’s predominant high-sulphur “Urals” grade of crude.

What complicates issues most, although, is that it’s Russian-owned: the Kremlin-controlled oil firm Rosneft controls 54 per cent of its shares and has little curiosity in processing crude from different sources.

Many in Schwedt concern the refinery, often known as PCK, can be pressured to shut if it loses entry to Russian oil. “That would be a nightmare scenario,” mentioned the town’s mayor, Annekathrin Hoppe. “People here fear for their existence.”

Schwedt’s largest employer, PCK has a workforce of 1,200. Hundreds extra work in ancillary companies, making pipelines, warmth exchangers, pumps and cooling models for the plant, mentioned Hoppe.

Schwedt mayor Annekathrin Hoppe: ‘People here fear for their existence’
Schwedt mayor Annekathrin Hoppe: ‘People here fear for their existence’ © Hannes Jung/FT

“All those jobs would be affected, and all those people have families,” she mentioned. Furthermore, “around 80 per cent of the town is supplied with district heating from PCK’s power plant”. It remains to be unclear, she mentioned, how properties could be heated if it goes out of enterprise.

The folks of Schwedt concern a repetition of the financial dislocation in the area after German reunification in 1990. “They’re facing a second deindustrialisation of east Germany,” mentioned Koeppen. “And they won’t take it lying down.”

Schwedt displays the area’s highs and lows. The town was virtually utterly destroyed in the Soviet advance throughout the second world warfare. Then in the Nineteen Fifties younger folks from throughout East Germany converged on Schwedt to rebuild the town and erect the PCK refinery.

Schwedt got here to embody the shut ties between Russia and the GDR. Local newspapers from the Nineteen Sixties conveyed the pleasure when PCK was related to the newly-built Druzhba pipeline in 1963.

The PCK company publication celebrates the first deliveries of Russian oil via the Druzhba (Friendship) pipeline in 1963
The PCK firm publication celebrates the first deliveries of Russian oil through the Druzhba (Friendship) pipeline in 1963 © Schwedt City Archive

“The oil has arrived!” mentioned a front-page headline in the PCK publication “Young Builder”. “Glory and honour to the builders of the longest pipeline in the world!”

Druzhba, which continues to supply 1 / 4 of Germany’s crude oil, all the time had constructive connotations for Patz. “It means friendship in Russian — such a lovely word,” she mentioned. “It means something good.”

Soon after it got here on-line in 1964, PCK established itself as the area’s predominant provider of petrol, diesel, jet kerosene and gas oil. Big customers — similar to Berlin’s worldwide airport — nonetheless rely on its merchandise.

So there was widespread anger in Schwedt when Germany signed up for the embargo. Some folks puzzled why it had not adopted the examples of Hungary, the Czech Republic and Slovakia, that are additionally linked to Druzhba however negotiated momentary exemptions from the import ban, citing their lack of alternate options to Russian oil.

“People just can’t understand why Germany voluntarily decided on this embargo,” mentioned Hoppe. “Everyone condemns this war, but people are also fighting for their jobs.”

Discontent has been seized on by populists on the proper and left. The laborious proper Alternative for Germany has put up posters in the town with the slogan: “If PCK dies, so does Schwedt”.

Chancellor Olaf Scholz insists the authorities is working to safeguard PCK’s future. Officials have promised that it’s going to proceed to course of oil subsequent yr and in 2024 and that jobs can be protected.

“Tabakbrunnen” at the Vierradener Platz, Schwedt.
Schwedt, in Brandenburg state, embodied the shut ties between Moscow and the GDR © Hannes Jung/FT

Schwedt, Brandenburg, Germany
Citizens from throughout the GDR helped to rebuild the town after the second world warfare © Hannes Jung/FT

To that finish they’re exploring other ways of supplying the refinery, principally through a pipeline from the northeastern port of Rostock.

But Koeppen, the MP, mentioned that received’t clear up the downside. The pipeline can ship solely 19,000 of the 32,000 tonnes a day of oil that PCK wants, he mentioned.

“Rostock port is also not deep enough to accept oil tankers,” he mentioned. The oil must be imported into Wilhelmshaven on the North Sea and transferred on to smaller ships, he added. “And we don’t have the ships.”

PCK additionally hopes to obtain oil from Kazakhstan, and is wanting into provides through the Polish port of Gdansk. “But the Poles say they don’t want to supply us while the plant is still owned by Rosneft,” mentioned a employee at PCK, who declined to be named. “And we can’t just brush that aside.”

Longer-term Berlin desires to safe PCK’s future by reworking it right into a “green refinery”. Two firms — Enertrag, a wind power agency, and Verbio, a biofuels producer that already has operations in Schwedt — have expressed an curiosity in taking stakes in PCK.

Hoppe mentioned with their involvement, the refinery might produce “green hydrogen” which may very well be mixed with CO₂ captured from the environment to make sustainable artificial fuels — together with “e-kerosene” for planes.

But it should take years for PCK to make the transition. Meanwhile, an oil embargo looms that would have fateful short-term penalties for the refinery.

“Three months have passed [since the embargo was agreed] and we’re still hearing the same promises,” mentioned Hoppe. “Time is running out.”

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