Trafigura sells shares of Russia-backed Indian refiner Nayara Energy

Key Takeaways:

  • Rosneft owns a 49.13% stake in Nayara.The exact size holding was split between Trafigura and Cyprus-based Russian investment group United Capital Partners.
  • The company said on 11th January that Oil trader Trafigura has agreed to sell its 24.5 % indirect stake in Nayara Energy to Italy’s Genera Group.
  • The Italian Investment Company, Mareterra Group Holding, paid $166 million.
  • Based on the disclosures in Trafigura’s last annual report, it is recorded at the above-quoted amount or at the book value of the stake.

The deal size was kept away from official statements. However, the current stake deal is amidst the tumultuous political and financial scenario in Russia- It faces Western sanctions.

Nayara Energy Ltd, previously known as Essar Oil, retains India’s third largest refinery, a port, and a network of more than 6,500 cross-country petrol pumps. The majority ownership belongs to Russia’s Rosneft.

Swiss headquartered Trafigura has agreed to sell an indirect stake(of Nayara) to Hara Capital Sarl. It has decided to sever ties with the Russian-based Rosneft. The Italian Genera Group would receive this stake now.

The financial details of the transaction were not unveiled.

The EU held 40 million tonnes of emergency diesel, and 10 million tonnes of petrol in June 2021 in their reserves. They have dropped, since, to 35.04 million tonnes, with automotive diesel constituting 30.4 million tonnes, and Gasoil accounting for 5.04 million tonnes.

The energy crisis faces a chaotic future- it would become more aggravated since Opec’s 2-million barrel per day production cuts come into force.

Oil analysts at LSG group’s market data provider Refinitiv mention that from February 5, 2022, the ban on Russian imports of refined products came into effect.

Since the inception of the Russia-Ukraine war, Reliance and Nayara have imported roughly 10 times more Russian crude. The pre-invasion levels topped at 2.82 million tonnes monthly during March-September.

As of 2022, Indian exports to Europe were northward after the invasion of Ukraine. Therefore, it is only appropriate that the Indian refiners take advantage of the massive diesel margins after the war-stricken situation.

As per Analysts’ reported the following on the raised exports to Europe. “It averaged at 7,30,000 tonnes per month, or 21 % of their total exports of 2.64 million tonnes/month, that peaked at 1.1 million tonnes in March against the pre-invasion period average of 5,70,000 tonnes per month.”

From the Asian region, according to Refinitiv, only Indian and Korean refiners can make winter-specification diesel for the EU, which is the world’s largest fuel consumer.

As the winter progresses, the estimation is that Asia and the Middle East can, at best, offer a supplementary 1.5-2.2 million tonnes per month of refined products for Europe.

In August 2022, diesel supply from Asia to Europe hit an 11-month high of 1.64 million tonnes. It is projected to rise as China has equipped a massive 15 million tonnes export quota for refined products.

The Rosneft-owned Nayara has a 1.67-million-tonnes-per-month refinery at nearby Hazira, Gujarat.
Mareterra Group is an energy investment firm focusing on energy and carbon efficiency infrastructure. It is active in France, Italy, and Spain; there are claims it wishes to super-size outside of Europe.

The refineries are shut down for maintenance purposes, bringing an overall standstill in production and other departments. They are intertwined and face issues at the departmental level.

Now imagine the cascading effect an entire oil company has. Tackling obstacles at every level is vital. An example is bringing in a cash influx for the operations and a merger-acquisition situation.

Trafigura is a leading commodities group owned by its employees and founded 30 years ago. It connects vital resources to power and builds the world.

This super-company deploys infrastructure, market expertise, and a worldwide logistics network to transport oil and petroleum products, metals and minerals, gas, and power from where they are produced to where they are needed.

The company prides itself on forming solid relationships making supply chains more efficient, secure, and sustainable.

Filippo Ghirelli, Founder of Mareterra Group® Holding, said, “We believe that reducing energy costs is possible in all industries, especially in the context of the energy transition. Nayara Energy is already implementing a number of low-carbon projects, plans to become a major manufacturer of petrochemical products, and is actively developing its network of retail service stations. In this context, we will share our relevant experience with Nayara Energy to strengthen both the technological and environmental leadership of the company in the Indian market.”

- Published By Team Timeswire

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