Rosneft’s bid to offload its 49.13% stake in Nayara Energy is now imperiled following the European Union’s most recent sanctions package targeting Russian energy ties, according to a Bloomberg report.
As part of the EU’s 18th round of sanctions, refined petroleum products derived from Russian crude, even when processed in third-country facilities, are expressly banned, and the Vadinar refinery owned by Nayara has been singled out. These measures also coincide with a significant reduction in the Russian oil price cap to approximately $47.60 per barrel, aimed at curtailing Moscow’s crude revenues.
The implication is profound for Rosneft. Any prospective sale to buyers like India’s Reliance Industries or Saudi Aramco now faces major regulatory and commercial risk, since ownership or association with Nayara could expose them to liability under new sanctions regimes.
Nayara Energy, which operates a 400,000 bpd refinery in Gujarat and runs nearly 7,000 retail outlets across India, has become the first Indian petroleum facility to fall within the scope of EU sanctions. This development restricts the company’s ability to export fuels to European markets and undermines Rosneft’s efforts to monetize its equity in the venture.
Bloomberg reports that Rosneft is also being hamstrung by constraints on repatriating profits due to existing sanctions architectures, coupled with India’s capital movement restrictions, complicating any exit strategy.
In summary, the EU’s latest sanctions decision delivers a strategic blow to Rosneft’s divestment plans in India. Buyers and stakeholders now face heightened legal and reputational risks, with the refined products blockade against Nayara likely to deter or derail any proposed transaction.
