Rosneft-backed Nayara Energy slams EU sanctions, says ‘actively exploring' legal options
The EU on Friday announced that it was sanctioning Nayara, in which Russian oil giant Rosneft holds 49.13 per cent stake, as part of its tranche of actions in the latest bid to force the Kremlin's hand to end the war in Ukraine. The EU also banned import of fuels made from Russian crude and coming from third countries and lowered the price cap on seaborne Russian crude from $60 to $47.6 per barrel in an effort to curtail Russia's revenue from oil exports. The package includes sanctions and other actions targeting Russia's energy, shipping, banking, and military industry sectors. The energy sector is a key focus area of the package as oil exports account for a third of Russia's revenue.
Reacting to the EU sanctions, External Affairs Ministry Spokesperson Randhir Jaiswal said Friday that India does not subscribe to any unilateral measures. 'We are a responsible actor and remain fully committed to our legal obligations. Government of India considers the provision of energy security a responsibility of paramount importance to meet the basic needs of its citizens. We stress that there should be no double standards, especially when it comes to energy trade,' he said in a statement.
'Recently, Nayara Energy has come under international scrutiny, facing political pressures and the imposition of sanctions by the European Union which have no legal basis. We categorically state that this unilateral move by the European Union is founded on baseless assertions, representing an undue extension of authority that ignores both international law and the sovereignty of India. It is to be noted that while many European countries continue to import Russian energy through various sources, they take a high moral ground by chastising and sanctioning an Indian asset for processing Russian crude largely used by its domestic population of 1.4 billion Indians and businesses,' the refiner said in a statement on Monday. Rosneft had slammed the EU's action on Sunday, terming it 'unjustified and illegal'.
The sanctions would mean that Nayara Energy would not be able to export petroleum fuels and products to Europe, and potentially hit any of its dealings with European companies. It could also hit Rosneft's plan to exit Nayara as the EU sanctions could spook prospective investors. The company, formerly Essar Oil, was earlier part of the Essar group. It was renamed as Nayara Energy after a group of investors including Rosneft acquired it from the Essar group. Like Rosneft, Kesani Enterprises—a consortium led by Italy's Mareterra and Russia-based United Capital Partners (UCP)—hold 49.13 per cent stake in the company. While owned by a group of international investors—mainly from Russia—Nayara said that it is an Indian company governed by Indian law.
'Nayara Energy strongly condemns the European Union's unjust and unilateral decision to impose restrictive measures on our company. Nayara Energy operates in full compliance with the laws and regulations of India. As an Indian company, we are deeply committed to supporting the nation's energy security and fostering economic growth. Our organization is governed by Indian law and proudly serves as a vital contributor to the country's energy infrastructure,' the refiner said.
'Such actions not only undermine India's interests, but also risk disrupting the uninterrupted supply of petroleum products that are essential to millions of Indian citizens and industries. We remain steadfast in our role as a reliable energy partner for India, and we urge all stakeholders to respect the principles of sovereignty and fair international conduct. We are actively exploring all legal and appropriate avenues to address this situation and to protect the interests of our operations, employees, and our stakeholders,' it added.
The company said that it is committed to ensure that there is no disruption to its daily operations or its long-term strategic objectives, adding that it 'firmly' believes that there is 'no impact whatsoever' on the company's interests. Nayara accounts for around 8 per cent of India's total refining capacity and 7 per cent of the country's fuel retail network. It has over 55,000 direct and indirect employees across India.
'A major tax payer in India, Nayara Energy since August 2017 has contributed over Rs 2.5 lakh crore in cumulative direct and indirect taxes to help build India's growth story. As a responsible corporate entity, we uphold the highest standards of compliance with all applicable laws and regulatory frameworks. Transparency, legal accountability, and constructive stakeholder engagement are cornerstones of our operations,' the refiner said, adding that it has invested over Rs 14,000 crore in various projects over the past eight years and will continue to invest over Rs 70,000 crore over the coming years in segments like petrochemicals, ethanol production, and fuel marketing.
Sukalp Sharma is a Senior Assistant Editor with The Indian Express and writes on a host of subjects and sectors, notably energy and aviation. He has over 13 years of experience in journalism with a body of work spanning areas like politics, development, equity markets, corporates, trade, and economic policy. He considers himself an above-average photographer, which goes well with his love for travel. ... Read More
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