Rosneft calls EU sanctions on Nayara Energy unjustified and illegal

Russian oil giant Rosneft on Sunday termed as unjustified and illegal the sanctions that the EU has slapped on its Indian unit, Nayara Energy.

"Rosneft Oil Company considers the European Union's decision to impose restrictive measures on the Indian refinery of Nayara Energy as unjustified and illegal," it said in a statement.

"These sanctions are yet another example of extraterritorial implementation of politically motivated restrictions that blatantly violate international law and infringe on the economic interests of a sovereign state."  The European Union on Friday imposed sanctions on the Indian oil refinery of Rosneft and lowered the oil price cap, as part of a new raft of measures against Russia over its war in Ukraine.

The fresh sanctions package on Russia included new banking restrictions and curbs on fuels made from Russian crude oil.

The lowered oil price cap - currently set at USD 60 per barrel - means Russia will be forced to sell its crude at reduced rates to buyers like India. As the second-largest purchaser of Russian oil, India stands to benefit from this move. Russian crude currently accounts for nearly 40 per cent of India's total oil imports.

"Rosneft emphasizes that it is not a controlling shareholder of Nayara Energy - the Company's share in the authorized capital of the enterprise is less than 50%," the Russian firm said, adding Nayara is managed by an independent Board of Directors.

Rosneft said the European Union's grounds for imposing sanctions are completely far-fetched and false in content. "Nayara Energy is an Indian legal entity whose economic activity is aimed at the development of its assets. The entity is taxed entirely in India.

"Nayara Energy shareholders have never received dividend payments and the accumulated profits have been used exclusively for the development of the refinery and petrochemicals and the company's retail network in India," it said.

The Nayara Energy refinery is a strategically important asset for the Indian energy industry, providing a stable supply of petroleum products to the country's domestic market.

"The imposition of sanctions against the refinery directly threatens India's energy security and will have a negative impact on its economy," Rosneft said.

"Such actions of the European Union demonstrate complete disregard not only for international law, but also for the sovereignty of third countries.

Rosneft views these sanctions as part of the EU's destructive policy aimed at destabilizing global energy markets. The restrictions on Nayara Energy are yet another example of the EU's use of unfair competition practices," it said.

Rosneft said it is counting on the fact that Nayara Energy will take measures to protect the legitimate interests of its shareholders and consumers, which will be supported by the governments of Russia and India.