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Russian oil giant PJSC Rosneft Oil Company has initiated preliminary discussions with Reliance Industries (RIL) for the sale of its 49.13 percent stake in Nayara Energy, which operates a 20-million tonnes-per-year oil refinery and 6,750 petrol pumps across India, PTI reported citing sources. A potential acquisition could position Reliance as India’s top oil refiner, surpassing state-run Indian Oil Corporation (IOC), and significantly boost its presence in the country’s fuel retailing market.
However, the negotiations remain at an early stage, and there is no certainty they will culminate in a deal as valuation differences persist, three sources with direct knowledge of the matter said.
Rosneft executives have visited India at least three times over the past year, holding talks in cities including Ahmedabad and Mumbai with potential investors.
Western sanctions have hindered Rosneft’s ability to repatriate earnings from India, prompting its decision to seek an exit from Nayara. A suitable buyer, the sources said, would ideally have significant overseas revenue streams, enabling quick cross-border payouts for the stake.
“As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis. We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges,” a RIL spokesperson told PTI.
Rosneft had acquired Essar Oil, later renamed Nayara Energy, in 2017 for $12.9 billion but has struggled to extract full financial benefits due to sanctions. The Russian major decided to exit Nayara in 2024, with UCP Investment Group also selling its 24.5 percent stake. Nayara’s other major stakeholder, Trafigura Group, holds 24.5 per cent and may exit if a deal materialises, sources said.
Rosneft and UCP have offered their stakes to Reliance, Adani Group, Saudi Aramco, and the ONGC/IOC combine, but the $20-billion valuation has been deemed excessive by most. Adani opted out, citing both valuation concerns and existing commitments with TotalEnergies that limit its fossil fuel investments to natural gas.
Saudi Aramco remains a serious contender, seeking downstream assets in India, though it too considers the $20-billion price tag steep.
Nayara’s acquisition would give Reliance, which already operates 68.2 million tonnes of refining capacity at Jamnagar, a total capacity surpassing IOC’s 80.8 million tonnes and a stronger foothold in fuel retailing.
ONGC and IOC value Nayara’s marketing network at no more than $2.5-3 billion and its refinery similarly. For Reliance, the marketing network alone could be worth around $5.5 billion, with refinery synergies potentially adding $5 billion in value, sources added.
Rosneft has reportedly lowered its valuation to $17 billion, yet this remains above what many prospective buyers are willing to pay. No formal agreement has been reached, and Rosneft has not issued any official statement confirming a sale.
(With inputs from PTI)
