Rosneft Holds Preliminary Talks with Reliance on Nayara Stake Sale
Russian oil giant Rosneft has initiated early conversations with Reliance Industries to explore the sale of its 49.13% stake in Nayara Energy, the operator of Vadinar refinery and over 6,700 fuel stations in India. The move aligns with Rosneft’s ongoing efforts to address Western sanctions that restrict its ability to repatriate earnings from overseas assets.
Stake Sale Dynamics
Rosneft acquired its Nayara share in 2017 for approximately $12.9 billion. Under pressure from sanctions and seeking liquidity, the company has reportedly reduced its asking price—initially set around $20 billion—to near $17 billion. Reliance, along with Adani, Saudi Aramco, ONGC, and Indian Oil, are among potential buyers evaluating the opportunity.
Strategic Value for Reliance
For Reliance, adding Nayara’s assets to its portfolio would dramatically boost capacity. With the Vadinar refinery (~20 Mtpa), combined with Jamnagar’s two refineries (~68 Mtpa), the company’s total refining capacity would exceed 80 Mtpa—outstripping all other Indian competitors. It would also propel Reliance into the lead position in fuel retail across India with its expanded pump network.
Valuation Gap & Deal Challenges
A significant obstacle remains the valuation gap. Reliance values the retail distribution network substantially higher—estimating its worth at around $5.5 billion, compared to ONGC/IOC’s estimate of $2.5–3 billion. This disparity highlights the differing assessments of synergy and strategic benefit that each party brings to the table.
Wider Market Implications
Rosneft has engaged multiple bidders, but responses have varied. Adani appears focused on renewables rather than fossil fuel assets, while Aramco has expressed measured interest. Any potential sale will require exhaustive regulatory review and would come against India’s broader strategic energy policy.
