Sanctions cloud over Nayara's 2nd terminal
Yet again, Rosneft-affiliate Nayara Energy is facing difficult questions from bidders over the risks of violating EU and US sanctions.
Nayara is evaluating technical proposals from Monobuoy, US-based SOFEC and Netherlands-based Bluewater Energy sent by the December 6 (2023) deadline for a second terminal at Vadinar with a Single Point Mooring (SPM) for more crude to feed its Vadinar refinery capacity expansion to 40m t/y. France's Imodco was also shortlisted but stayed away.
"In the technical proposals, Nayara wanted detailed specifications of the buoy and other parts of the second terminal," says a source. "If these specifications are suitable, it will invite financial proposals."
Nayara has been in discussions with these companies since October and November (2023). Our source says SOFEC and Bluewater separately sent letters with their technical proposal seeking clarity on Nayara's "beneficial ownership and control" to insulate themselves against sanctions on Rosneft and its chief executive, Igor Sechin, following Russia's February 2022 invasion of Ukraine.
These companies wanted information on Nayara's "risk mitigation" measures in response to the sanctions. "Nayara was unable or unwilling to resolve these concerns," our source adds.
One key concern is whether Nayara can make crucial decisions independently or needs Rosneft's approval. "At first, there was no response from Nayara on this," we hear.
"But later, it said it is fully autonomous." Unconvinced, companies asked for a formal Nayara letter stating it is independent and not controlled by any stakeholder.
"Our management wanted clarity on the trade sanctions clause," we learn. Nayara's BD team was open to providing a formal assurance.
"But then told us their legal department is unwilling," we are told. "We spoke to their legal department directly, and they refused to give a formal assurance."
Submitting technical proposals does not commit companies to sending in price bids. "Only after companies get clarity from Nayara on its beneficial ownership will they send in price bids and commit to the project," we hear.
"Falling foul of sanctions just for one project makes no sense."