Petroleum Minister Dharmendra Pradhan's initiative, steps towards growing India's oil production sector

NYCS 13-Apr-2018

The Principal ‘Sevak’

Loksatta Editorial

There are more than one reasons why Petroleum Minister, Mr. Dharmendra Pradhan deserves congratulations. The most recent being the successfully sealed deal with Saudi Arabia’s ARAMCO Company to set up an oil refining unit at Nanar, Maharashtra, along with Indian government-owned oil companies. Mr. Dharmendra Pradhan has structured this deal. There are various aspects to this pact, all of which are vital from the viewpoint of security from energy crisis in India today. But this is not the sole reason for his felicitation. Out of the entire cabinet ministry of our Hon. Prime Minister, Mr. Narendra Modi , Mr. Dharmendra Pradhan hold the prime position as a go-getter who is not just proficient and scholarly but also a dynamic leader with a sound foresight. It is indeed a challenging task to strive incessantly undistracted, while being surrounded by people, constantly bickering about issues and with close association with the Prime Minister. The department of Petroleum Ministry is always under the lens of leading industrial houses. Under the Congress government, a certain minister was known to have been acting as a minister of some oil Business company, instead of that of the Government!. However nothing ludicrous of this sort has been observed of Pradhan, and he has successfully remained clear of all the controversies. This is another reason to admire him. So this is about his working ways.

Now lets get to analysing the current pact by Mr. Dharmendra Pradhan as a Petroleum minister. Saudi Aramco is the world's largest oil company. Saudi Aramco is 16 times larger than the second largest Exxon Mobil Private Limited (the first of course the apple). Saudi Arabia’s share in world's daily oil market is about 30 percent. This share belongs to Aramco. The Saudi Empire is the sole owner of the company. The company has invested in oil refining sector of France, America and some African countries. The company is looking at investing the same in the Nanar oil refinery project near Ratnagiri, Maharashtra. Investment for this project is estimated at 4,400 crore dollars, in which half of the investment will be from Aramco. After completion of this project, everyday 12 lakh barrels of oil will be refined. A gigantic two lakhs crore tonnes of chemicals will be produced each day, which will be used for production of range of products from Plastic to Naphta. With poor development rate in India, we are currently importing 40 lakh barrels of oil per day. Out of this quantum, Aramco supplies 8 lakh barrels of oil. Whatever our stand on ‘Swadeshi’ maybe, the fact remains. Our country is in oil deficit. Therefore we import 82% crude oil to fulfil our requirement. We envisage increasing our growth rate to 9%, at least we envision this. To attain this target or at least reach somewhere near the same, we need 1 crore barrels per day. If this happens, our Nation shall be the World’s largest oil consumer.

At such times, a project which projects to fulfil our requirement must be welcomed. Pandit Nehru and Keshavdev Malviya created institutions like Oil and Natural Gas. Bombay High project near Mumbai has been catering to our requirements since the past 4 to 5 decades. The Nanar Project is ahead of current times and we should comprehend the futuristic approach, to realize the importance of this project. Jamnagar’s Reliance project has changed the picture of Gujarat’s industrial horizon. Similarly, the Nanar Project has a potential to become Maharashtra’s Jamnagar.

The comparison of investments between two projects is not as crucial as is the production of pure mineral oil from the project. The Reliance Jamnagar project produces 12 lakh 40 thousand barrels of pure oil per day after considering the recent augmentation in capacity. This is world’s biggest oil refining unit. In comparison, Nanar’s initial capacity will only be 12 lakh barrels. This however is an important fact to be noted. This a single corporate house monopolised this business sector for all these years. Apart from the monopoly, there were no guarantees that this refined oil will be sold in the country. It is a well-known historic fact that, when price restrictions were imposed on oil, the markets in our neighbouring countries looked more attractive. Hence to ensure that no single party singularly dominates an important industry like crude oil, a Project of this stature was imperative and much required. The Nanar Project in collaboration with Saudi Aramco will address such a requirement. It is important to note that Government companies like Hindustan Petroleum, Bharat Petroleum, and Indian Oil will have 50% share in this project. Aramco Company will hold the remaining 50% ownership. Apart from this, many Hydrocarbon based chemicals will be generated as bi-products of the oil refining process. These chemicals are utilised for manufacture of many useful products such as fertilizers, petroleum jelly, pesticides, and nylon. Even this area of business was dominated by some private enterprises. It is well know what shocking events occurred as a result of such cartelization back in the eighties. All these burning issues will be put to rest with the kick-off of the Nanar Project. And these are the exact reasons why this crucial decision taken by Mr. Dharmendra Pradhan becomes significant and praise-worthy.

Now, looking at the opposition to this project. Despite his tenure in the Shivsena, and later changing sides to the Congress, and then maintaining bonhomie with the BJP, Narayan Rane is still clueless about what is to be done and what his deliverables will be, from this project. He, along with the Shivsena are in opposition of the project now. This is not on the basis of any particular principle or philosophy. Anyways, neither holds that extent of depth of perception. Their opposition will cease the moment they are awarded some or the other contracts in this project. This is the track record witnessed since Enron days. And it is futile to hold any such hope that this is likely to change in the present scenario. Fortunately, the Chief Minister Mr. Devendra Fadanvis is cognizant of the situation and fully well understand how much he should entertain such resistance. Therefore without any hesitation or holding back, he has promoted the project full throttle. And the evidence lies in the manifestation of this pact sealed by Mr. Dharmendra Pradhan. They should keep ignoring any such obstruction and hostility towards this project, even in the future.

Mr. Keshavdev Malaviya, who was the erstwhile cabinet minister in the Energy sector, is regarded with respect in this field, even today. With the success of the Armaco Project, Mr. Dharmendra Pradhan will also belong to this league and his name will also be held in high esteem. He will be truly considered as a principal ‘sevak’ in this field.