Rosneft exploring exit from Nayara Energy amid sanctions: Report

Discussions have been held with Indian conglomerates, with the unit reportedly valued at over $20 billion Russia’s largest oil company, Rosneft, is reportedly considering selling its 49.13 percent stake in Nayara Energy (formerly Essar Oil), which it acquired in 2017 as part of a $12.9 billion deal, according to the Economic Times, citing sources familiar with the matter. The Russian energy giant, burdened by sanctions imposed by the US and EU since 2014, has been unable to repatriate earnings from Nayara Energy in recent years, which could be a key factor driving its potential exit, the report said. Discussions have been held with Indian conglomerates, with the unit reportedly valued at over $20 billion, the sources told Economic Times. However, these talks are at an early stage, and a deal may not materialise due to the complexities and scale of the asset. Story continues below Advertisement Remove Ad Other Investors Also Looking to Sell Separately, UCP Investment Group, one of Russia’s largest financial investment firms, is also exploring the sale of its 24.5 percent stake in Nayara Energy, with a reported valuation of over $5 billion, the Economic Times added. Following the 2017 acquisition, Rosneft took 49.13 percent ownership, while Trafigura Group and UCP held 24.5 percent each, with the remainder owned by retail shareholders. Potential Buyers & Industry Talks Rosneft and UCP have reportedly held preliminary discussions with major Indian business groups, including Reliance Industries, Adani Group, and JSW Group, the sources told Economic Times. Senior Rosneft executives visited Delhi in March to discuss the matter with key energy officials. Additionally, Saudi Aramco has been engaged in talks, as per the Economic Times report. The Saudi oil giant, which has committed to investing $100 billion in various sectors in India, has previously explored opportunities in India’s refining sector. Story continues below Advertisement Remove Ad Story continues below Advertisement Remove Ad Challenges in Sealing the Deal Despite the interest, some Indian companies have opted against pursuing the acquisition, citing concerns over low returns on investment, potential capital infusion requirements, and sanctions-related complications. Nayara Energy, which operates India’s second-largest refinery at Vadinar, Gujarat, is also India’s largest private fuel retailer, with over 6,500 outlets nationwide. Aramco’s India Strategy Aramco had earlier committed to participating in India’s stalled West Coast refinery project in Maharashtra. However, it is now in talks with state-run ONGC and BPCL, both of which are seeking a foreign partner for new petroleum refineries, the Economic Times reported. In an emailed response, Rosneft declined to comment, stating, "The company does not discuss its production plans with media representatives." Meanwhile, Reliance Industries, Adani Group, and UCP Investment Group did not respond to Economic Times queries, while JSW Group and Saudi Aramco declined to comment. Moneycontrol could not independently verify the report.

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