India-Saudi Arabia JV in Ratnagiri Refinery and Petrochemicals given go-ahead
The Joint Venture between global majors such as Saudi Aramco and Abu Dhabi National Oil Company (Adnoc) with Indian oil marketing companies – Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) for 50% stake each in Ratnagiri Refinery and Petrochemicals (RRPCL) has been given a go-ahead by Prime Minister Mr. Narendra Modi Government hours before the election dates were announced by the Election Commission of India. This decision may have political repercussions in the State as setting aside the US& 44 billion project was one of the conditions put forward by the ruling BJP’s alliance party Shiv Sena over the site of the refinery.
There is no clarity at present on whether the Government will be looking for alternate location or whether the project will be initiated at the previously decided location.
Prior to the visit of Saudi Crown Prince Mohammad bin Saman’s visit to India, the Maharashtra state government led by Mr. Devendra Fadnavis had put on hold the 42,000 notices for land survey and acquisition, which were served to families in 17 villages of Ratnagiri district, following an electoral arrangement with Mr. Uddhav Thackeray, the chief of Shiv Sena. Shiv Sena was responding to the protests by the locals citing the impacts the project will be having in an environmentally sensitive area. According to the understanding between the two nations, the project is expected to be commissioned by 2025.
While the ruling BJP sees the Ratnagiri refinery project as crucial for meeting India’s expanding appetite for fuels, Shiv Sena, which holds considerable influence in Maharashtra which elects 48 Member of Parliaments, Shiv Sena was airing the opposition of farmers in opposing the oil refinery in the area. Chief Minister Mr. Devendra Fadnavis had then announced that the project would now be built at a different location. With an electoral pact already in place between BJP and Shiv Sena in Maharashtra and the BJP giving go-ahead to the project a shade prior to the announcement of General Elections, it remains to be seen how Shiv Sena will react to the changed circumstances.
When the Saudi crown prince Mohammed bin Salman visited India last month, the both the countries had decided to increase their tie-ups in petroleum sector, including Saudi’s participation in Indian Strategic Petroleum Reserve (SPR) program.
Saudi Arabia is second-largest supplier of crude and liquefied petroleum gas (LPG) to India. In 2017-18, India’s crude oil imports from Saudi Arabia were 36.8 million tonnes, accounting for 16.7 per cent of India’s total imports.