Did the UK just sanction itself? BP’s hidden link to Nayara Energy

The UK government on October 16 (Thursday) announced a package of 90 new sanctions aimed at cutting off revenue streams from Russia's oil, which is being used to fund the war in Ukraine. Among the sanctioned entities, there is Nayara Energy, which is operating the Vadinar Refinery in Gujarat, India. India, on Thursday, rejected the sanctions and called out the double standards on energy trade. The UK is specifically targeting the Russian oil companies like Rosneft and Lukoil.

"We do not subscribe to any unilateral sanctions. The Government of India considers the provision of energy security a responsibility of paramount importance to meet the basic needs of its citizens," said Randhir Jaiswal, spokesperson for the Ministry of External Affairs.

How is Nayara Energy linked to British Petroleum?

There is a dormant connection between Mumbai-based Nayara Energy and the UK oil giant British Petroleum. Which in hindsight might imply that the UK have managed to do something that no one has done before. Rosneft, the Russian government-backed oil company, owns approximately 49.13 per cent stakes in Nayara Energy. So, sanctioning Nayara is indirectly hurting the revenue of Rosneft. However, contrary to the popular notion, British Petroleum still has around 19.75 per cent stake in Rosneft. It tried to exit the Russian government-backed oil company Rosneft in February 2022, in retaliation for the Russian invasion of Ukraine. However, it failed to sell off the stakes, and it remains frozen. The Russian government still holds the shares due to international sanctions and Russian law, which made divestment impossible.

On October 27, 2022, Rosneft CEO Igor Sechin at the Eurasian Economic Forum said, "Despite all the rhetoric, BP remains, I would say, a 'shadow' shareholder; does not participate in the operations of the company's management bodies; and retains all its rights and corresponding dividends package. Taking this opportunity, I would like to convey to our friends from BP that the dividends to which they are entitled for the second half of 2021, totalling $700 million, have been transferred to the accounts opened for them."

So did the UK sanction itself?

Legally and economically, no, it didn't; symbolically and politically, yes; that's the irony in international relations. The UK sanctioned Nayara Energy, where Rosneft owns a share, which is, in turn, part-owned by British Petroleum on paper. BP can not touch its shares, and the UK just sanctioned Nayara Energy. But Reddit had been buzzing about ‘UK sanctioning itself’. Which is partly true because if the Russia-Ukraine war ends, depending on the deal between the Western nations and Russia, BP could pocket a huge profit for its share or continue its partnership with Rosneft.