Rosneft’s Nayara stake sale: How EU sanctions could derail the deal
Russian oil major Rosneft’s proposed sale of its 49.13% stake in India-based Nayara Energy has hit a significant obstacle following the European Union’s latest round of sanctions targeting Russia’s oil sector. The sanctions, announced on July 18, have directly impacted Nayara’s operations and complicated Rosneft’s efforts to divest its interest in the company.
Rosneft has been exploring exit options from Nayara for some time, citing difficulties in repatriating dividends due to existing sanctions. Preliminary discussions had reportedly taken place with several Indian conglomerates, including Reliance Industries, Adani Group, and JSW Group. However, the valuation of Nayara Energy—estimated at over $20 billion—and geopolitical considerations had already made the process complex before the latest sanctions.
Nayara’s Vadinar refinery in Gujarat has been designated for restrictions by the EU’s 18th sanctions, citing its ties to Rosneft and its role in refining Russian crude. The new measures include asset freezes, limits on financial and shipping services, and bans on importing petroleum products that are refined from Russian oil, even if processed in third countries such as India.
These developments have significantly raised the risk for any potential buyer. The restrictions have already begun to affect Nayara’s operations—most notably, a BP-chartered tanker reportedly left the port without loading crude following the sanctions announcement. Nayara has since adjusted its export payment terms, requiring advance payments to navigate the tightening compliance environment.
