Saudi Arabia, the UAE and India have agreed on a huge oil project despite ongoing protests from local farmers and fisherman near the Indian port of Ratnagiri. The deal worth an estimated $44 billion has been agreed by Aramco, the state-owned oil company of Saudi Arabia; ADNOC, the national oil company of Abu Dhabi; and a consortium of three Indian oil companies to develop a massive refinery and petrochemicals complex.
The project agreed on Monday is slated to be one of the largest refineries in the world. Operations are predicted to begin by 2022 with the aim of producing around 1.2 million barrels of oil per day.
It's reported that the required seizure of 15,000 acres of land needed for the project will have a negative impact on as many as 22,000 farmers and 4,500 fishermen. Despite the effects of the land seizure on the local population, the Indian government has emphasised the project's benefits, claiming that it will boost the national economy and create jobs.
Saudi Aramco will supply 50 per cent of the fuel to the refinery. However, the company's ambitions don't just stop at the refining process. It wants to cover everything in the downstream value chain, say market experts. Riyadh is desperate to tap into the Indian market; as the third largest consumer of oil after the US and China, and supplying New Delhi's oil demands is an opportunity to regain any market share that it has lost to US shale.
Locals in India have been up in arms, protesting for months over the impact that the refinery will have on their lives. Following the signing of a memorandum of understanding last year, thousands of farmers took to the streets for seven days in a row to oppose the government's attempts to carry out a joint measurement survey.
The villagers who are dependent on farming and fishing are said to be astonished by the government's decision to give the project the green light. Their lives have already been blighted by a nearby nuclear project and they fear that the new refinery will cause further damage to the environment and destroy their way of life.
Sixteen villages in the area will be affected. The process of surveying the land for compensation purposes was initiated by the government last November, but has been obstructed by the villagers' protests.
The local people are also outraged because the area was declared to be ecologically sensitive in 1997. The Indian News Agency reported that the Bombay Natural History Society carried out a study on the coastal ecology in 2011. The subsequent report was submitted to the government, highlighting the damage that industrialisation of the area would cause to local life forms.