NEW DELHI/MUMBAI: Indian refiner Nayara Energy, part-owned by Russian oil giant Rosneft, could find it harder to raise funds for expansion as a result of Western sanctions in response to Russia’s invasion of Ukraine, sources with direct knowledge of the matter said.

“We are cautious even if there is limited exposure and in this case they have a majority Russian exposure via Rosneft and a Cyprus based fund, so it makes sense to put these loan disbursals on hold and to play safe,” one banking source said.

Nayara said in response to questions about its funding plans that it did not have any direct dependence on banks for the expansion of its retail network as the majority of its outlets are owned and operated by dealers.

“Some banks do provide working capital financing facilities to some of our dealers, which is governed by the bi-lateral agreement between the bank and the franchisee, without any recourse to Nayara,” it said in a statement on Thursday.

Nayara is in the process of rebranding its fleet of more than 6,000 retail fuel stations in its own name from Essar Oil as it was formerly known, and plans another 3,000 outlets.

Dealers who want to set up Nayara’s fuel stations and those rebranding their facilities, are facing difficulty in getting funds from banks, the sources said.

Rosneft owns a 49.13% stake in Nayara, which was formerly known as Essar Oil, while a similar-sized holding is split between global commodities trading house Trafigura and Cyprus-based Russian investment group United Capital Partners.