Nayara Energy Looks For New Indian Bank After EU Sanctions

Private Indian oil refiner Nayara Energy, owned in part by Russia's Rosneft, is looking for a new local banking partner after recent European Union sanctions disrupted its domestic financial operations. The firm is said to be negotiating with Indian banks like UCO Bank, which has already processed sensitive energy deals.

According to sources, several Indian banks have become cautious in offering even basic banking services to Nayara due to concerns linked to its Russian ownership. The firm has reached out to the Indian government for help since it is experiencing trouble processing payments for crude imports and securing export proceeds.

Despite these challenges, Nayara asserts that it is well-placed in terms of liquidity. Nevertheless, the sanctions have compelled the company to cut down refining output to 70–80% of capacity levels, a sharp decline from over 100% operating levels just a few weeks ago. The cut is after wavering by traders and shipping disruptions, with tankers being diverted and storage space becoming tighter.

In a tactical move, Nayara recently shipped its first gasoline export cargo since sanctions, loading about 43,000 metric tons of the fuel onto the Tempest Dream, which sailed from Vadinar to Sohar, Oman, on August 4.

With international options dwindling, the company is seeking to sell fuel through domestic channels. It is in talks with Indian state-run refiners and fuel retailers to take up volumes that had been slated for export.

Apart from financial and operational issues, the EU sanctions have also influenced Nayara's information technology infrastructure. Microsoft discontinued its services to the company, cutting off email and communication. To counter this, Nayara has provisionally switched its internal communication infrastructure to Rediff.com and has approached the Delhi High Court with a case against Microsoft for unilaterally terminating services and causing loss of access to essential data.

As the broader effects of the sanctions continue to unfold, Nayara is actively adapting its strategy to ensure operational continuity and regulatory compliance, while also seeking government support to stabilize its key functions.