Dubai: The world’s largest oil producer, Saudi Aramco, and Abu Dhabi National Oil Company (Adnoc) are a step closer to build a $44 billion mega-refinery in the western Indian state of Maharashtra. This is to be the single largest overseas investment in India.
Following protests from farmers over the previous choice of location - in the district of Ratnagiri - the Maharashtra government has asked one of its state-owned units to acquire 13,409.52 hectares from 40 villages for the refinery in neighbouring Raigad district.
The 1.2 million barrels per day integrated mega refinery and petrochemicals project was announced in June last year, and was touted to be India’s largest refinery, which would feed into fuel supplies for the world’s third largest consumer of crude oil. But the project ran into rough weather after farmer protests erupted as they feared damage and loss to coconut and cashew plantations.
Villagers in Raigad have not protested to the said refinery as yet, according to Devendra Fadnavis, Chief Minister of Maharashtra said in a written reply to state lawmakers.
“CIDCO (City and Industrial Development Corporation) has sought land documents of those 40 villages to initiate acquisition process of the notified land under the Navnagar Development Corporation from the Raigad Collector’s office,” Fadnavis added.
Saudi Aramco and ADNOC will jointly own 50 per cent of the new joint venture, with the remaining owned by a consortium consisting of Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation Ltd.
“Land acquisition problems are common in India and delays are to be expected,” said Vandana Hari, CEO of Vanda Insights based in Singapore. “The important thing is that the Indian government and its companies are behind the project, so it will be pushed through. With Aramco and Adnoc signed up as partners, it is also a question of India’s reputation on the international stage as an investment destination,”
India is currently ranked behind the US and China as the world’s third-largest oil consumer. It consumed 206.2 million tonnes (over 4 million bpd) in 2017-18. India contributed 14 per cent of the global demand growth, or 2.45 million barrels per day last year.
“World energy demand is expected to grow exponentially by 2050, driven in large part by India,” Amin H. Nasser, President and CEO at Saudi Aramco, had said at the time of the project’s announcement.