Drashti Chheda In a move that could significantly reshape India’s energy landscape, Russian energy giant Rosneft has entered into early-stage discussions with Reliance Industries Ltd (RIL) to offload its controlling stake in Nayara Energy. The deal, if successful, would not just bolster RIL’s refining and retail footprint, but could also set the tone for a new chapter in India’s energy consolidation story.
While the talks are still in the exploratory phase, what’s already turning heads is the revised price tag. Rosneft, which previously valued Nayara Energy at $20 billion, is now reportedly willing to settle for $17 billion—perhaps a nod to the cold shoulder it received from other Indian suitors. Whether this discount signals desperation or a strategic shift remains to be seen, but one thing is clear: RIL smells opportunity.
Nayara Energy isn’t just any asset. With a massive 20 million tonnes per annum (MTPA) refining capacity at Vadinar and a retail network of 6,750 fuel stations, it’s a beast waiting to be unlocked. For RIL, this could be the missing piece in the jigsaw, catapulting its refining output past IndianOil’s 80.7 MTPA and turning Jio-bp’s relatively modest 1,700-outlet network into a nationwide powerhouse overnight.
But it’s not all smooth tarmac. Rosneft faces a tricky conundrum—how to repatriate sale proceeds amid ongoing Western sanctions tied to Russia’s geopolitical entanglements. Moving billions across global financial borders isn’t exactly a walk in the Kremlin garden right now. This could either slow down negotiations or lead to creative payment structures that might not sit well with regulators.
Then there’s the ghost of valuation past. Remember RIL’s much-hyped Saudi Aramco deal that fizzled out due to price disagreements? That cautionary tale is bound to influence Mukesh Ambani’s approach this time around. No one wants to commit billions only to get entangled in boardroom tug-of-war or geopolitical red tape.
Interestingly, the timing aligns with RIL’s recent moves in the downstream space. The Adani-Total and Jio-bp fuel alliance from earlier this year hinted at bigger ambitions in the mobility and fuel retail sector. Scooping up Nayara would not only leapfrog RIL into the big league but also position it strategically against future competitors—especially as India inches toward a complex, hybrid energy future.
And let’s not forget the not-so-distant camaraderie. Just last December, RIL inked a massive oil import deal with Rosneft—500,000 barrels per day, valued at nearly $13 billion a year. That handshake may now be morphing into a more permanent embrace.
Whether this potential acquisition becomes a blockbuster or another boardroom cliffhanger remains to be seen. But one thing’s for sure: if Reliance pulls this off, it won’t just be refining crude—it’ll be refining the entire narrative of India’s energy dominance.
