Mumbai-based oil refiner Nayara Energy Ltd., part-owned by Russian energy giant Rosneft PJSC, has asked government officials to broker a relationship with a domestic lender such as UCO Bank Ltd. after EU sanctions prompted greater caution among larger banks, according to people familiar with the matter.
Executives at Nayara held talks with officials from the Indian finance ministry last week, the people said, asking not to be identified because discussions are private. The company is seeking a local bank to finance and wire payments for crude oil imports and to help it receive payments for refined fuel product exports, the people said. A ratings company in July said Nayara’s liquidity was healthy.
Privately held Nayara may find some banks reluctant to provide even basic services after it was sanctioned by the European Union in July, the people said. The refiner is seeking out a smaller Indian lender with less exposure to global financial markets in an effort to mitigate the risk of secondary sanctions, the people said, citing UCO Bank, which facilitated oil trades with Iran in 2018.
Nayara’s challenges could be compounded by President Donald Trump’s threat to impose a 25% tariff and additional penalties over India’s trade relationship with Russia. Flows of Russian oil into India have surged since Moscow’s forces invaded Ukraine in 2022, allowing Indian refiners to benefit from discounted crude.
A Nayara spokesperson did not immediately reply to Bloomberg’s email seeking comment. A spokesperson for the Ministry of Finance also didn’t reply to an email seeking comment.
The refiner has loaded at least two clean-petroleum product, or CPP, cargoes since the Mumbai-based refiner was sanctioned by the European Union last month, according to ship-tracking data.
Local rating company CareEdge cited Nayara’s low leverage and healthy liquidity as positive factors, noting the company has cash and equivalents of 105.5 billion rupees ($1.2 billion), according to a July release. Still, exports account for more than a quarter of the firm’s business, though direct exports to the EU are “negligible,” the report said.
Rosneft PJSC owns just over 49% of Nayara, which accounts for nearly 8% of India’s refining capacity and 7% of its retail-fuel network. Another stake of just over 49% is held by a consortium, Kesani Enterprises Co., and the remainder by retail investors. Nayara is reducing run rates at its west India refinery after the sanction prompted buyers to stay away.
