Rosneft Declares EU Sanctions on Nayara Energy as Unjustified and Illegal

Rosneft, a major Russian oil company, has criticised the European Union's sanctions on its Indian subsidiary, Nayara Energy, labelling them as unjustified and illegal. In a statement, Rosneft condemned the EU's decision to impose these restrictive measures on Nayara Energy's Indian refinery. The company argues that these sanctions represent an extraterritorial application of politically motivated restrictions that violate international law and infringe on the economic interests of a sovereign state.

The European Union recently imposed sanctions on Nayara Energy as part of a broader package targeting Russia due to its involvement in the Ukraine conflict. This new set of measures includes banking restrictions and limits on fuels derived from Russian crude oil. Additionally, the EU has lowered the oil price cap, currently set at USD 60 per barrel, compelling Russia to sell its crude at reduced prices to countries like India.

Impact on India's Oil Imports

India, as the second-largest buyer of Russian oil, stands to benefit from the reduced oil price cap. Russian crude constitutes nearly 40% of India's total oil imports. The lowered cap means India can purchase Russian oil at more competitive rates, potentially enhancing its energy security and economic stability.

Rosneft clarified that it does not hold a controlling stake in Nayara Energy, with its share in the company's authorised capital being less than 50%. The company highlighted that Nayara is governed by an independent Board of Directors. Rosneft also stated that the EU's reasons for imposing sanctions are unfounded and misleading.

Nayara Energy's Role in India's Economy

Nayara Energy operates as an Indian legal entity focused on developing its assets within India. The company is fully taxed in India, and its shareholders have not received dividend payments. Instead, profits have been reinvested into refining and petrochemical development and expanding its retail network across India.

The refinery operated by Nayara Energy is crucial for India's energy sector, ensuring a steady supply of petroleum products to meet domestic demand. Rosneft warned that the EU's sanctions pose a direct threat to India's energy security and could negatively impact its economy.

Rosneft's Response to EU Sanctions

Rosneft accused the European Union of disregarding international law and undermining the sovereignty of third countries through these sanctions. "Rosneft views these sanctions as part of the EU's destructive policy aimed at destabilizing global energy markets," it stated. The company sees these actions as an example of unfair competition practices by the EU.

Rosneft expressed confidence that Nayara Energy will take steps to safeguard its shareholders' and consumers' legitimate interests. It anticipates support from both the Russian and Indian governments in this endeavour.

The situation highlights ongoing tensions between Russia and Western nations over geopolitical issues. As global energy markets remain volatile, such developments could have far-reaching implications for international trade and economic relations.

With inputs from PTI