Unable to repatriate earnings, Rosneft looks for an exit from Nayara Energy

Reliance Industries, Adani Group, and JSW Group may be among potential buyers of Rosneft's 49.13% stake in Nayara Energy

Russia’s largest oil company, Rosneft, is considering selling its 49.13 per cent stake in Nayara Energy (formerly Essar Oil), citing difficulties in repatriating earnings due to international sanctions, according to a report by The Economic Times.

 

Rosneft had acquired the stake in 2017 as part of a $12.9 billion deal, marking the largest foreign investment in India’s refining sector. However, US and European Union sanctions, imposed since 2014, have made it increasingly difficult for the company to benefit financially from its Indian operations.

 

Reliance, Adani, JSW among potential buyers

 

Potential buyers reportedly include Reliance Industries, Adani Group, and JSW Group, though some Indian conglomerates are said to be cautious due to concerns over low return on investment, capital requirements, and geopolitical complexities.

 

 

Preliminary discussions between Rosneft and Indian companies have valued Nayara Energy at over $20 billion.

 

Russian finance firm also seeks exit

Alongside Rosneft, UCP Investment Group, a major Russian financial firm, is also exploring the sale of its 24.5 per cent stake in Nayara for over $5 billion. The rest of Nayara’s ownership includes Trafigura Group (24.5 per cent) and a group of retail shareholders.

 

Senior Rosneft executives visited New Delhi in March, holding meetings with key Indian energy officials. There have also been discussions with Saudi Aramco, which is expanding its footprint in India. Aramco had earlier pledged a $100 billion investment in Indian industries, including refining and petrochemicals.

 

However, no official deal has been confirmed, and Rosneft has not made a formal statement on the matter.

 

Nayara Energy offers shareholder buyback option

Nayara Energy operates India’s second-largest single-location refinery in Vadinar, Gujarat, and has over 6,500 fuel outlets, making it the largest private fuel retailer in the country.

 

Despite its strong domestic presence, its ownership structure remains uncertain. The company has offered to buy back 25.9 million outstanding shares from minority shareholders at ₹731 per share, providing an exit route for retail investors who have held shares since its voluntary delisting in 2016.

 

Russian refineries hit by global sanctions

The potential divestment comes amid shifting dynamics in global oil markets. In January 2025, Russia increased its refining operations in response to new US sanctions on Russian oil traders and tankers, which have constrained crude exports. At the same time, drone attacks by Ukraine on Russian refineries and domestic economic pressures have further complicated matters.

 

Rosneft’s plans to modernise its refineries may also face delays due to geopolitical risks and financial constraints. 

 

 

Saudi Aramco eyes Indian expansion

Saudi Aramco continues to seek opportunities in India’s refining and petrochemical sectors, in alignment with the Make in India initiative. The firm had earlier agreed to join the West Coast Refinery Project in Maharashtra, though that plan has stalled. Aramco is now in discussions with ONGC and BPCL, which are seeking foreign partners for new greenfield refinery projects.

 

While talks around Rosneft’s exit from Nayara Energy remain ongoing, the deal’s scale and complexity make its outcome uncertain.