Bloomberg: New EU sanctions may disrupt Russian Rosneft's Indian refinery stake sale

New EU sanctions on an Indian refinery processing Russian oil may hinder Russian energy giant Rosneft's plans to sell its stake.

Source: Bloomberg

Details: The largest Russian oil company seeks to exit its Indian project as it has been unable to repatriate profits due to existing sanctions. 

The EU has banned imports of petroleum products derived from Russian oil and, according to Kaja Kallas, EU High Representative for Foreign Affairs and Security Policy, has for the first time imposed sanctions on Rosneft’s largest refinery in India – the Vadinar refinery, owned by Nayara Energy, in which Rosneft holds a 49.13% stake.

Rosneft has been in discussions about selling its stake to Reliance Industries, which is owned by billionaire Mukesh Ambani. However, the fresh sanctions could complicate Reliance’s involvement, as they might jeopardise its European business, a region where it regularly imports Indian fuel, including diesel.

The Moscow Times, an independent Amsterdam-based news outlet, reported that sanctions prevent Rosneft from transferring its profit share to Russia, compounded by the rupee’s unconvertible status and India’s capital withdrawal restrictions. 

Meanwhile, Indian private companies are among the world’s largest buyers of Russian oil.

Background: The European Union has finalised one of its "strongest" sanctions packages against Russia, including a reduced oil price cap.

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