Rosneft has reportedly started early-stage discussions with Reliance Industries to sell its 49.13% stake in Nayara Energy, according to PTI sources. If the deal moves forward, it could significantly strengthen Reliance’s position in India’s refining and fuel retail sector.
Potential to Surpass Indian Oil’s Refining Capacity
With Reliance already operating 68.2 million tonnes per annum at its Jamnagar facility, acquiring Nayara’s 20 million tonne Vadinar refinery could push Reliance ahead of Indian Oil Corporation’s 80.8 million tonnes per annum capacity. Both refineries are located in Gujarat, offering operational synergies.
Valuation Remains a Key Hurdle
Rosneft is reportedly seeking around $17 billion, reduced from an earlier expectation of $20 billion. However, even the revised price is considered steep by interested buyers, including Reliance. Industry insiders suggest there’s no certainty that the ongoing talks will result in a final agreement.
Rosneft’s Exit Strategy Amid Sanctions
Rosneft had acquired Nayara (then Essar Oil) in 2017 for $12.9 billion. Now, Western sanctions have limited its ability to repatriate earnings from India, prompting its decision to exit.
Reliance’s Advantage in Fuel Exports
Reliance is seen as a strong contender due to its significant earnings from refining and exporting Russian crude. A CREA report revealed that Reliance earned an estimated €724 million (about ₹6,850 crore) between January 2024 and January 2025 by exporting such refined products to the US.
Other Stakeholders Also Looking to Exit
Nayara’s other shareholders, UCP Investment Group and Trafigura, each holding 24.5%, are also exploring exits. If Reliance proceeds with the deal, Trafigura may sell under the same terms.
Interest from Other Players
Saudi Aramco has shown interest in the deal, eyeing downstream expansion in India. However, valuation concerns remain an issue. Aramco had previously backed out of a $15 billion deal for a 20% stake in Reliance’s O2C business in 2019.
Adani Group was also approached but declined, citing its agreement with TotalEnergies and a strategic pullback from traditional fossil fuels.
Fuel Retail Network a Major Attraction for Reliance
Nayara operates around 6,750 petrol pumps, compared to Reliance’s 1,972. Industry experts note that refining alone isn’t profitable without a strong retail presence. Reliance is expected to value Nayara’s outlets higher—at ₹7 crore per pump—compared to the ₹3–3.5 crore valuation by IOC and ONGC.
Estimated Asset Valuations Vary
IOC and ONGC reportedly value Nayara’s refinery at $2.5–3 billion, while Reliance may consider it worth $5 billion, citing better integration benefits. Despite interest from multiple players, no formal confirmation has been made by Rosneft or Reliance.
Possible Sectoral Impact
If the deal materializes, it could reshape the Indian energy market, giving Reliance a stronger hold in both refining and fuel distribution.
