MOSCOW (MRC) -- Trafigura is preparing to sell its 24.5% indirect stake in an Indian oil refining joint venture with Russia's Rosneft to an Italian group, a letter seen by Reuters shows and people familiar with the commodity trading firm's plans said.
Trafigura holds the stake in Nayara Energy, which owns India's third largest refinery, a port and a network of more than 6,000 fuel stations across India, indirectly through a 49.84% holding in Singapore-based Tendril Ventures Pte Ltd.
It plans to sell the Nayara stake to Italy's Genera Group Holding S.P.A, people familiar with the matter said, without giving detail on what had prompted Trafigura to sell.
Trafigura declined to comment. Genera did not respond to Reuters emails and messages seeking comment. Nayara said it could not comment on the actions of its shareholders.
It is unclear how much Trafigura's stake in Nayara, formerly known as Essar Oil, is worth.
Nayara, which owns the 400,000 bpd Vadinar refinery plant in the western Indian state of Gujarat, changed hands for nearly USD13 B in 2017, so the Trafigura stake then would have been worth more than USD3 B.
The other owner of Tendril is Russian investment group United Capital Partners (UCP), which also has 49.84%. Tendril's wholly-owned subsidiary, Cyprus-registered Kesani, owns a 49.13% stake in Nayara Energy. Rosneft's Singapore unit also has a 49.13% stake and public shareholders the remainder.
When Kesani and Rosneft bought the Nayara stakes in 2017, the sale was structured in a way to prevent Rosneft from acquiring a controlling stake and avoid running foul of US sanctions on the Russian oil major.
"As a result of the proposed transfer, Trafigura will cease to hold an indirect shareholding in Kesani and hence also in the borrower (Nayara)," Virag says in the letter seen by Reuters.
After the transfer, Genera will hold a 24.5% stake in Nayara, through Tendril and Kesani, the letter said.
As MRC informed earlier, India's Nayara Energy hopes to operate its 400,000 barrels per day (bpd) refinery in western India at close to 100% capacity in 2021 as fuel demand is picking up.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.
MRC