Germany comes to the rescue of the big gas energy companies

In the financial crisis of 2007 and 2008, the banks had to be rescued. In the euro crisis, between 2010 and 2012, the economies of entire countries were saved, such as Greece, Ireland, Portugal or Spain. Ten years later, in Germany it seems to be increasingly clear that the State must intervene to help the energy companies that had been doing business with gas.

Uniper, Securing Energy For Europe (SEFE) and VNG are Germany's largest gas importers. But this trio of companies, the three pillars of the arrival of natural gas in Germany, are described these days as companies almost on the verge of collapse. They need the support of the State to continue standing.

The most illustrative case is that of Uniper, a company that employs 11,500 people in the 40 countries in which it operates. Some 4,000 people work for this company in Germany, which is the major importer of natural gas from Russia to German soil. Its thousand clients, according to the accounts of the company itself, are industrial companies, public gas companies and other suppliers.

Since, in retaliation for the international sanctions against Russia, Moscow has closed the gas tap to Europe, companies like Uniper have had to look for that hydrocarbon in other international markets. These are more expensive than the one that comes from Russian soil.

At the price Uniper pays for gas, the company has entered a spiral of losses with an uncertain end. Due to contractual commitments with its clients prior to the crises, Uniper cannot sell the gas at a price that reflects the reality of the value of this energy source when it does not come from Russia.

At the moment, according to the business daily Handelsblatt, Uniper is about to be nationalized. The newspaper described a scenario according to which up to “90% of Uniper shares could pass into the ownership of the German state”.

The Government of Chancellor Olaf Scholz began to support Uniper last July. He did it with a rescue plan by which the State was going to take over 30% of the company's shares through an injection of 7,700 million euros. In addition, through the German Development Bank (KfW), a financial entity controlled by the Government, access to credit lines of up to 9,000 million euros was provided. All in all, Uniper's net losses up to June reached 12,345 million euros.

Scholz's initial rescue plan, however, doesn't seem like enough. "Due to the current uncertainty in the operating environment, the parties involved are also examining alternative solutions, including a direct capital increase, which would lead to a significant majority stake of the German government in Uniper," read a company statement. energy this week.

As reported by the international agency specializing in economic information Bloomberg, the German government is considering buying the part of Uniper held by the Finnish energy company Fortum, today the owner of the large German gas importer. Bloomberg quoted sources close to the cabals made in the German Executive by Chancellor Scholz and, above all, his vice-chancellor and economy minister, Robert Habeck. In his information, there was talk of an eventual and "historic takeover" of the three large gas companies.

In the absence of official announcements, the uncertainty only aggravates the situation of Uniper, which has lost much of its value on the stock market. The company's shares were paid at the end of this week at 3.92 euros per share. Just before Russia launched its illegal invasion of Ukraine, each share was worth around 33 euros.

Like Uniper, the case of the company SEFE is representative of the debacle in the German gas sector. Behind those acronyms hides what was once called Gazprom Germania, the German subsidiary of Russian gas giant Gazprom.

Gazprom Germania was renamed SEFE after the German authorities decided to take control of the company, an "absolutely necessary" measure, in Habeck's terms, implemented last April in view of the energy crisis. So it was already coming that this autumn and this winter could pose energy shortages in Germany.

Gazprom Germania had, among other things, control of Germany's largest gas reserve facility, in the municipality of Rehden. They fit in it 3,900 million cubic meters. Since the middle of last year, gas stopped arriving in the usual quantities, to the point that, as this reserve is also used to supply customers, last June the facilities were almost empty, at 2% of their capacity.

Rehden is a "symbol of the dramatic dependence of the Germans on Putin's gas", they have explained in the Teutonic economic weekly WirtschaftsWoche, as has also been the fact that the German state takes over Gazprom Germania through the Federal Network Agency .

As there are not two without three, the VNG company is also suffering from the gas price situation when it comes to buying that hydrocarbon outside of Russia. This company is the third company that imports the most gas for Germany. It is only behind Uniper and SEFE. Last week the process of applying for aid to the Executive began.

The objective of EnBW, parent company of VNG, with this request for state aid is "to absorb the current accumulation of significant losses due to the substitution of natural gas and allow the continuation of commercial operations", explained the company responsible for this other gas in trouble

Germany, which had opted for gas as a transition energy until reaching climate neutrality, a goal that Scholz and company have set for 2045, must now assume that the cost of said transition will be higher and more complicated than expected. This is what Habeck said, according to Bloomberg, when asked about the possible nationalizations of German gas import companies: “It is very complex. We are working very carefully."

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