Sanction-hit Nayara delays Vadinar oil refinery maintenance work

By Rakesh Sharma

 

India’s Nayara Energy Ltd. will postpone maintenance work at its Vadinar oil refinery planned for early next year, as contractors seek to avoid dealing with a company backed by Russia’s Rosneft PJSC and sanctioned by Europe.

 

The private refiner will delay planned works and the closure of its 400,000 barrels-a-day complex from February until April 2026, according to people familiar with the matter. They asked not to be named as the discussion is not public.

 

The decision was made due to the lack of European contractors willing to work with the company, they said, adding the Mumbai-based refiner has yet to secure alternative providers.

 

A Nayara spokesperson did not immediately respond to Bloomberg queries on the shutdown.

 

The company last carried out extensive maintenance at Vadinar in November 2022. Indian refiners typically undertake major overhauls every four years, coordinating schedules to avoid fuel shortages. While refineries can handle slight postponement of such works, long periods without maintenance and repairs can add to safety and operational risks.

 

Prior to the roll-out of sanctions, Nayara’s Vadinar refinery relied on equipment, technology and catalyst support from European suppliers including Germany’s Siemens AG and Denmark’s Topsoe A/S, the people said. The blacklisting by Europe has also stalled Nayara’s planned petrochemical project at the same site, following the withdrawal of suppliers such as France’s Technip Energies and Japan’s Toyo Engineering Corp. from the project.

 

In July, the EU sanctioned Nayara for allegedly funding Russia’s war in Ukraine. Rosneft, which holds nearly half the company, has called the sanctions “unjustified and illegal.”

 

The refinery is currently processing Russia’s flagship Urals crude after global suppliers of oil from Saudi and Iraq stopped shipments and banks halted financing of overseas payments to sellers