This doesn't make sense to me. Can i get an explanation?
The German state seized a local German branch of the Russian Gazprom company. In order to secure its energy supplies... which come from Russia.
Are they in essence capturing some reserves?
The German state seized a local German branch of the Russian Gazprom company. In order to secure its energy supplies... which come from Russia.
Are they in essence capturing some reserves?
Edit: Source (paywalled, german) https://www.spiegel.de/wirtschaft/gazprom-germania-hat-berei...
No,
sized here means "put under control of a trustee until the situation is resolved" it doesn't mean "take over ownership".
The reason that happens is because the persons(s) currently in control of Gazprom Germania did try to use that control to act against German law in a way which threatens national security.
This is also more about Gas infrastructure then Gas as far as I can tell.
My guess is that some Russian oligarch tried to move ownership to one (or potentially many) chains of "dummy" companies which obfuscate the actual owner and go through many other non-Russian nationalities. This e.g. would make many legal actions against Gazprom Germania harder as the new (dumy) "owner(s)" would not be from Russia or any other sanctioned state.
what legal action? Gazprom is not under any sanctions…
https://www-sueddeutsche-de.translate.goog/wirtschaft/erdgas...
It's also worth pointing out that there's been some evidence suggesting that, in the weeks and months leading up to the Russian invasion of the Ukraine, the "fill level" of the Russian-owned storage infrastructure within Germany was decreased, which would both be a way for Russia to attempt to leverage gas delivery against sanctions (in other words, blackmail), as well as yet another strong indication that the invasion was a deliberate Russian aggression planned well in advance.
If you're interested in more and understand German, I'd recommend the most recent episode of Lage der Nation, which talks about this at much more length: https://lagedernation.org/podcast/ldn284-ukraine-krieg-6-woc...
It's a bit more complex than that. Following the liberalization of the gas market, "discount providers" appeared who simply bought on the spot market because that is usually drastically cheaper than long-term contracts, and also the large utilities shifted parts of their purchase to spot market contracts for the same reason. For many years this worked just fine from an outside POV, and the margins on the retail gas price that the utilities made were usually large enough to account for short-term supply price hikes without having to raise new capital or retail prices. All seemed to be well.
Last year, people noticed that Gazprom's storage facilities were unusually low. Gazprom of course denied any wrongdoing, they claimed they are fulfilling their contractual obligations and that's it. Which is objectively true and as a result, no regulatory agency had any legal authority to step in.
And now, with the invasion ongoing (and for a few months prior), Gazprom still kept their long-term contracts but unlike all the prior times did not supply much on the spot market - which led to the well observed price hikes and utilities going bankrupt or out of business because their "old" strategy of simply buying on the spot market didn't work out.
The responsibility for the current situation rests to a large part on the utilities who forewent resilience (in form of more expensive long running contracts) in favor of short term profits. We dug our own and the Ukrainian's graves at the same time.
That being said, just to clarify: the discussions I was referencing in the GP comment suggest that Gazprom has not been acting as a good-faith rational actor, and has in fact been keeping their storage infrastructure even less full than you would expect due to high gas prices.
Yes, I merely explained how they were able to deflect the accusations of acting in bad faith for so long.
Gazprom was leaving literal billions of dollars on the table by not offering any meaningful spot contracts for months now, until the invasion began - a fact that no one could explain with anything else but war preparations, and war was seen as a ridiculous idea almost everywhere, so public discussion was simply left at "we have no idea what they are doing in Moscow".
What do you expect to happen when long-term contracts get tied to spot prices? Why the hell would Gazprom willingly lower the spot prices when bulk of its sales will suffer from it?
Because that is what they have done for the last decades - the pipelines have more than enough capacity, even without NS2. They only stopped selling on the short-term market last year.
The only explanation why Gazprom was leaving that obscene mountain of money on the table is because they have been ordered to do so by Vladolf himself, so that he has leverage against Germany in the Ukraine invasion.
Are there people out there who have doubts about this? Regardless of any opinions on the rationale behind it, it's very clearly something that was planned in advance. I didn't think that was something that was up for debate.
Its a political push and pull about who defaults on the existing contracts on gas import, seeing as Russia wants to be payed in ruble now, while Germany would prefer the payments to be stuck on a EU bank account as a form of reparation payments to the Ukraine. To prevent this outcome, Russia in effect might be liquidating the Gazprom Germania. With Gazprom Germania being the ones doing the actual importing. Over the last weekend there was a change in ownership of the Gazprom Germania to new unknown owners. So they might be already bankrupt. To prevent this, Germany is now seizing control of Gazprom Germania and might be on the hook to prevent an insolvency to not default on the contracts with Russia.
In short, the German government fucked up majorly.
edit: Check "throwhow"s post in this thread for a longer summary
He told the world up until February 23rd that everybody was dumb to believe that Russia would invade. I would not believe anything Fefe says on his blog, ever. He dips into conspiracy theories time and time again and when he gets proven wrong he just says that it was meant to be "media competency training".
In case somebody can refute the explanation (or give a better one) of the Gazprom structure and motivation, i would be happy to hear the problem with it. As i see it, despite the rambling its a short and concise explanation of who does what why.
There’s nothing wrong with saying the government fucked up (though I don’t think it did). But the non sequitur opinion doesn’t add to the discussion.
Is that illegal?
I wonder about rule of law. We talk about this as sacrosanct here in the "West".
It is funny that when push comes to shove (in my perception at least), we're quick to break the rules to get the outcome we want.
When say a 3rd world country does something like this in response to a "Western" multinational's actions (perhaps a controversial example would be Mossadegh nationalizing APOC), then the response we take it is pretty severe (often involving significant amounts of violence) and we portray ourselves as being "morally" rightous, often with the very same "rule of law" claim.
Just something I like to think about in this scenario. Not trying to push any agenda.
> Is that illegal? I wonder about rule of law. We talk about this as sacrosanct here in the "West".
Ignoring the geopolitical aspects and the “critical infrastructure” aspects: yes it’s illegal everywhere to unilaterally abrogate a contract or to use bankruptcy or such rules to evade contract.
Normally of course this would be handled through the courts, but the answer to your question is “yes”
We definitely need to get rid of our double standards. All complaints about this from non-western countries are mostly correct.
"The German economy ministry said Gazprom Germania violated foreign trade law."
"Germany's economy ministry justified the takeover by saying it had not granted permission for the Gazprom Germania acquisition. Permission is required, the ministry said, if the investors are not from the European Union and "critical infrastructure" is involved."
And that's sufficient basis for a legal system to reassign ownership of assets?
Just for debate, lets say Google search is critical infrastructure and Google unilaterally took some action that upset the German economy ministry, would the legal system enable German authorities to take over assets that Google had within Germany and/or areas still under German control?
You’d have to dig into the specifics of German law in this case, but this is really unsurprising. Sales are routinely blocked and companies nationalised (with compensation, in civilised countries, though the fraud aspect could change this in this instance).
Gazprom Germania can believe the government is wrong and take it to the courts, but the legal argument seems sound.
Police seize drugs, for example.
German ministers can implement some draconian decisions, but they are operating in a large system of checks and balances, including independent courts and required parliamentary support for passing legislation.
The two scenarios are therefore roughly as similar as the arbitrary power of the owner of a privately held firm and the constrained power of a CEO of a publicly traded company.
I'm tempted to agree. However, I did raise a specific counter-example. In that case, a "proper democracy" (Mossadegh was democratically elected and presumably used entirely legal means to nationalize APOC assets), and then the long arms (CIA, MI6) of another set of "proper democracies?" undertook a violent coup to take back the assets. I'm not aware of how/whether those "long arms" interacted with the large system of checks and balances that you mentioned.
Not making any point about your example, which was indeed despicable behaviour.
Under some circumstances if your company operates essential infrastructure, yes. (And always had been, btw.)
https://www.reuters.com/business/energy/germany-approves-law...
> In Germany, a third of gas storage belongs to Russia's Gazprom (GAZP.MM), whose facilities in Germany had lower levels of stored gas this winter than those operated by other companies.
In my opinion, Gazprom did so (last year) in order to strategically weaken Germany's position and strenghten Russia's position, by reducing the amount of gas that is stored in Germany.
If you really look for "sanctions" you'll see that there are some, but not really touching the energy sector since there is so far no viable alternative.