$60 billion oil refinery project likely to shift to Karnataka?

Having vehemently opposed Nanar oil refinery, Thackeray now stares at losing jobs & project

Mumbai:

While sharing power with the Bharatiya Janata Party (BJP) in 2014-19, Uddhav Thackeray and his Shiv Sena had vowed to scrap the $60 billion (around Rs 1 lakh crore) Mega Oil Refinery project at Nanar in Ratnagiri district. Now as the Chief Minister of Maharashtra, Uddhav Thackeray stares at the prospects of not only the Mega project shifting location to neighbouring  state of Karnataka, but also anticipated economic boost in terms of jobs and revenue.   

Interestingly, CM Uddhav Thackeray on Tuesday assured the captains of the industry that not a single industry will be shifted from Maharashtra to another state. It may be recalled that during the previous BJP led regime, of which he and the Sena were the junior partners, he and the Sena had gone to the extent of terming the project as “Vinashkari” (destructive) and vowed to scrap the project if voted to power.

After assuming the charge as the Chief Minister, the spate of “stop work notices” that he began to issue to projects like Metro 3 car shed at Aarey Milk Colony or stopping funds for the Jalyukta Shivar Yojana, it seems as though Thackeray and Sena have been jolted at the prospect of losing jobs and the economy as well. Since then the BJP has labeled the Thackeray government as being “anti-development”. 

That notion has only been further strengthened by the flight of Nanar oil refinery to neighbouring Karnataka. But the BJP too has been guilty of muzzling the voice of dissent of its former legislator Pramod Jathar who was critical of the stand taken by the Sena, in the hope that the alliance with Sena will return them to power.

In a recent development, a Memorandum of Understanding (MoU) was signed between Saudi Arabia’s state-run ARAMCO and Indian Strategic Petroleum Reserves Limited (ISPRL) on October 29, 2019, in New Delhi. Aramco’s Vice President Ahmad Al-Subayae and HPS Ahuja, Chief Executive Officer (CEO) and Managing Director (MD) of ISPRL signed the MoU.

Though, the Ministry of External Affairs (MEA) did not divulge the details of the clauses, terms and conditions in the MoU as it was a bilateral agreement, the objective to sign the MoU was to infuse in oil refinery sector in west coast of India.

Saudi Aramco along with UAE’s national oil company ADNOC has signed a preliminary deal with Indian state-run companies for a 50 per cent stake in a planned 1.2 million barrels per day (BPD) mega refinery on the country’s west coast. 

“From a purely buyer-seller relationship, we are now moving towards a closer strategic partnership that will include Saudi investment in a downstream oil and gas projects,” Prime Minister Narendra Modi had said in an interview to Arab News.

On the other hand, Modi had also said that the new regional government has been chosen (by the people in Maharashtra), he expects time to choose the land (for the project).

“The ball is now in India’s court,” Saudi Commerce minister Majid bin Abdul AL Qasabi had said.

According to senior bureaucrat of Maharashtra state government, who did not wish to name, the probability of set up of oil refinery project in Konkan is highly unthinkable in the current political situation. “The status of the project is in red tape and I don’t think it will be reinstated in any district in Konkan,” claimed the bureaucrat.

Devendra Fadnavis, former chief minister and now leader of opposition (LoP) in the assembly had said, the oil refinery project has the potential to change the economy of the state. It will not only strengthen the economy but will generate a huge direct and indirect employment.

Maharashtra Chief Minister Uddhav Thackeray had though claimed his government will not give stay to any development schemes commenced by prior Fadnavis government, his actions are opposite to his assurances. The flight of the mega project may also send negative signals in the business world and globally as well. 

Shiv Sena was the political party and Thackeray was the leader who had pushed Fadnavis government to dump the oil refinery project proposed at Nanar in Ratnagiri district. Later, Fadnavis tried to switch the project in neighbouring Raigad district and some hundreds of hectare land was identified, the Sena had opposed to set up the project anywhere in Konkan region.

Assessing these political consequences, the Modi government is planning to divert the project in Karnataka. The BJP is in power in Karnataka and for Modi, land acquisition for the oil refinery project will not be a big issue. However, according to LoP Fadnavis, it would be a big damage for Maharashtra, if it will be shifted in any other state from Maharashtra.