BERLIN, GERMANY - FEBRUARY 24: A woman wears make up in the colors of the Ukrainian flag protesting against Russian invasion of Ukraine in front of Brandenburg gate on February 24, 2022 in Berlin, Germany. Russia began a large-scale attack on Ukraine, with explosions reported in multiple cities and far outside the restive eastern regions held by Russian-backed rebels.(Photo by Hannibal Hanschke/Getty Images)

Germany nationalizes former Gazprom subsidiary

On Monday, Germany announced the nationalization of a former subsidiary of Russia’s energy giant Gazprom, as the country looks forward to take measures to secure its energy needs as it breaks free from relying on Russian resources.

Source: Reuters

Earlier known as Gazprom Germania, the company is now called Securing Energy for Europe GmbH (SEFE). It indirectly looks after the country’s largest gas storage facility located in northwestern Rehden.

On Monday itself, a similar move was also brought into action in Poland, when the country’s development minister announced that Warsaw will acquire Gazprom’s Polish assets.

The decision regarding Germany came on Monday, after the European Union Commission agreed over the weekend to provide the Russian subsidiary in Germany with an aid of €225.6 million ($233 million), making a way for the nationalization.

Why was the company nationalised by Germany?

The government of Germany insists that the move is paramount to secure its energy resources as the war goes on between Russia and Ukraine.

Earlier in April, Berlin had exerted its effective control over the company, leaving the ownership in questionable circumstances. Having said that, Germany’s Federal Ministry for Economic Affairs and Climate Action on Monday, tried to persuade banks and business partners to resume business relations or enter into new ones.

Gazprom pipelines in Germany Source: CNBC

The ministry added, justifying  its decision to nationalize.”This [situation] jeopardised the continuation of SEFE’s business operations and thus the gas supply,”

Now an asset of the German state, Russian Gazprom has effectively lost its shares in the company, as per the information provided by the ministry.

A similar move by Poland

Similarly on Monday, the Polish administration said that it would acquire 48% of Russian stake in Europolgaz, which owns the Polish section of the Yamal-Europe gas pipeline. The 4,107-kilometer (2,552-mile) pipeline joining Russia’s natural gas fields in the Yamal Peninsula and Western Siberia with Poland and Germany.

Polish Development Minister Waldemar Buda said the move was made to “ensure the security of [Poland’s] critical infrastructure.”, cited by the French news agency AFP in an emailed statement.

Poland sanctioned 50 Russian oligarchs and companies, including Gazprom, in response for Russia’s invasion of Ukraine in February. Russia, on the other hand, suspended gas supply to Poland after the country refused to pay in rubles.

Buda told Reuters, “We are doing all we can to counteract Russia’s aggression and eliminate Russian capital and influence, expropriation is not possible under [the] Polish constitution, hence we decided to enact compulsory management.”