Nayara Energy mulls legal recourse on EU sanctions, reiterates investment commitment

Mint

21-07-2025

New Delhi: Caught in the crosshairs of Western sanctions, Rosneft-backed Nayara Energy has hit back at the European Union's (EU) move to blacklist its Vadinar refinery in Gujarat, calling the action baseless, unilateral and a breach of international law.
In a statement on Monday, the company said it is actively exploring all legal options and that it will counter the EU's decision, which it claims undermines India's sovereignty and disregards global norms.
Contesting the sanctions, Nayara reiterated its deep commitment to India's energy security and long-term growth, announcing plans to invest over ₹ 70,000 crore in the long term across petrochemicals, ethanol plants, marketing infrastructure expansion, among other projects.
The company, which operates India's second-largest single-site refinery and contributes 8% of the country's refining capacity, emphazised that its operations fully comply with Indian laws.
"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," the company said.
Nayara Energy, which operates the 20 million tonne refinery in Vadinar, said it remains committed to India's growth story and has invested over ₹ 14,000 crores since August 2017 in various projects in India, including upgrading existing refining facilities, investing in a new petrochemical plant, and other new infrastructure projects.
'Nayara Energy will continue to invest over ₹ 70,000 crore in the long term towards petrochemicals, ethanol plants, marketing infrastructure expansion and refinery reliability including ESG projects,' the statement said. 'We are equally committed to community development, with an annual CSR budget of ₹ 200 crore dedicated to meeting the diverse needs of the communities we serve.'
Outlining its operations in India, Nayara said its operations are closely aligned with India's national priorities, as it contributes around 8% to the country's total refining capacity, 7% of India's retail petrol pump network and about 8% of polypropylene capacity. It also employs over 55,000 direct and indirect employees across the country.
"Our ongoing investments in domestic infrastructure, job creation, with continued investments in petrochemicals and retail network expansion underscores our unwavering commitment to the growing Indian market and to advancing the country's ambition of achieving energy self-sufficiency," Nayara Energy said.
The company said since August 2017, it has contributed over ₹ 2.5 lakh crore in cumulative direct and indirect taxes in India.
In August 2017, Rosneft closed the strategic transaction for the acquisition of 49.13% of shares of Essar Oil Ltd from Essar Energy Holdings Ltd (EOL) and its affiliates, and in 2018 rebranded it as Nayara Energy.
Moscow-headquartered Rosneft Oil Co. had on Sunday described the EU's sanction on Nayara Energy's refinery in Gujarat as 'unjustified and illegal'.
Rosneft had said it is not a controlling shareholder of Nayara Energy, as the company's share in the authorized capital of the enterprise is less than 50%, and the Indian enterprise is managed by an independent board of directors.
On Friday, in an attempt to target Russia's ability to raise revenues from its oil and energy sector as it wages a prolonged war with Ukraine, the EU unveiled sanctions on Nayara's Vadinar refinery and also lowered the price cap on Russian oil by 15% to $47.6 a barrel from $60. Among other steps, it also imposed sanctions on 'shadow fleet ships' that are largely used for moving crude oil from Russia.
Nayara Energy flayed the EU for adopting double-standards. "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 company said.
Following the EU's move, Randhir Jaiswal, spokesperson of the ministry of external affairs (MEA), said in a statement late Friday that India does not subscribe to any unilateral sanction measures. 'We are a responsible actor and remain fully committed to our legal obligations,' the spokesperson said.
The MEA spokesperson said the Indian government considers the provision of energy security a responsibility of paramount importance to meet the basic needs of its citizens. "We would stress that there should be no double standards, especially when it comes to energy trade," Jaiswal added.