The German Ministry for Economic Affairs and Climate Action Friday placed the German subsidiary of Russian-owned oil company Rosneft under federal fiduciary management. Rosneft holds roughly 12 percent of German oil refining capacity and controls three oil refineries in Germany of which the government will also partial control.

The purpose of the imposition of federal management is largely due to German companies’ refusal to work with the Russian-owned company during Russia’s invasion of Ukraine. The ministry’s press release stated that “[c]entral critical service providers like suppliers, insurance companies, IT firms and banks, but also clients, were no longer willing to work together with Rosneft – neither with refineries in which Rosneft held a stake, nor with Germany’s Rosneft subsidiaries, RDG and RNRM.”

The fiduciary management is intended to “counter the impending risk to the security of the energy supply” and is accompanied by a “future package” of economic stimulus which is to be announced by Federal Chancellor Olaf Scholz later today. Fiduciary management will officially transfer to Bundesnetzagentur, the German Federal Network Agency. Under fiduciary management, voting rights of shareholders in Rosneft are transferred to the agency. The press release stated that Rosneft “must bear the costs of the fiduciary management themselves.”