Rosneft in early talks with Reliance to sell stake in Nayara Energy; valuation key hurdle – Report – OXBIG NEWS NETWORK-OxBig News Network

Russian oil major Rosneft has initiated preliminary discussions with Reliance Industries for a potential sale of its 49.13 per cent stake in Nayara Energy, according to sources cited by PTI. The talks, still in early stages, could mark a major consolidation in India’s oil refining and fuel retailing space, positioning Reliance to become the country’s largest oil refiner and expanding its fuel pump network significantly.If the deal materialises, Reliance would surpass Indian Oil Corporation’s (IOC) current refining capacity of 80.8 million tonnes per annum, given it already operates 68.2 million tonnes capacity at Jamnagar. Nayara’s Vadinar refinery, with a capacity of 20 million tonnes per annum, is located close to Jamnagar in Gujarat.However, valuation remains a sticking point. Sources cited by PTI claim that Rosneft is seeking around $17 billion, revised from its earlier ask of $20 billion, which most suitors, including Reliance, still consider steep. “There is no guarantee that the talks may lead to a definite deal,” said one of the sources familiar with the matter.Rosneft, which had acquired Essar Oil in 2017 for $12.9 billion and renamed it Nayara Energy, is reportedly looking to exit due to Western sanctions that have restricted its ability to repatriate earnings from Indian operations.Reliance, which earns significant overseas income through fuel exports, particularly from refining Russian crude oil, is seen as a strong contender. According to the Centre for Research on Energy and Clean Air (CREA) report published earlier this year, Reliance earned an estimated €724 million (about Rs 6,850 crore) in one year, from January 2024 to the end of January 2025, by exporting fuel refined from Russian crude to the US from its Jamnagar refinery. Other stakeholders in Nayara include UCP Investment Group (24.5 per cent) and Trafigura (24.5 per cent), both of whom are also looking to exit. Sources quoted by PTI say that Trafigura may sell its stake on the same terms if a deal is struck.Saudi Aramco is also reported to be in the fray, with interest in downstream integration in India. However, valuation concerns persist for Aramco as well, said sources. The company had previously entered a non-binding pact in 2019 to acquire a 20 per cent stake in Reliance’s O2C business for $15 billion, which was later scrapped.Adani Group was also approached but declined due to its agreement with TotalEnergies, which limits fossil fuel investments to natural gas, and broader reservations about entering what is increasingly seen as a “sunset industry.”For Reliance, Nayara’s 6,750 petrol pumps are particularly valuable. Its own fuel station count stands at just 1,972. “Oil refining alone is not a profitable business. Unless you have marketing, you can never make money,” an industry official explained.IOC and ONGC, other prospective suitors, are also hesitant. As per PTI, they value Nayara’s petrol pumps at Rs 3–3.5 crore each and the refinery at around $2.5–3 billion. Reliance, with greater synergies from integrating Nayara’s assets, is estimated to value the fuel retail network higher, up to Rs 7 crore per outlet, and the refinery at around $5 billion.There is no official confirmation yet from Rosneft or a definitive agreement on the table. But if talks proceed, it could reshape the competitive landscape in India’s energy sector, giving Reliance a broader footprint in both refining and fuel marketing.