Richard Orange

New oil giants rise in Gandhi’s native land

Richard Orange visits the Mahatma’s stony homeland in north-west India — and finds local tycoons competing to build oil refineries that will dwarf capacity in Europe

Gazing out over India’s Gulf of Kutch from the small jetty owned by Essar Oil, you would hardly think you were witnessing the birth of one of the world’s new industrial heartlands. Placid turquoise waters stretch out to the low landmass opposite; behind you lie mile upon mile of shimmering salt pans where flocks of flamingos aimlessly totter.

But this great natural harbour — sheltered to the south by the Kathiawar peninsula, better known as the birthplace of Mahatma Gandhi — may soon be the world’s busiest oil terminal. So far, India has made its mark on the global economy by taking on outsourced clerical and call-centre work from the west; now it is turning its hands to the altogether more potent business of oil refining. And the Gulf of Kutch, the closest Indian harbour to the oil fields of the Persian Gulf, is where the crude comes in.

Just 40km to the east is Reliance Industries’ hulking Jamnagar plant — a gleaming city of tangled pipes and metal spires, covering an area nearly the size of Edinburgh. And 21km inland is Essar’s own plant, Vadinar.

When its upgrade is completed at the end of this year, Jamnagar will surpass Venezuela’s Paraguana refinery to become the world’s largest, processing 1.2 million barrels each day. What is less widely known in that Essar’s owners, Ravi and Shashi Ruia, plan to catch up with Reliance — which is controlled by the Ambani family. The Ruias also aim to reach 1.2 million barrels per day, I was told by Harry Riems, the engineer from ABB of Sweden who has overseen Vadinar’s construction. That means that by some time in the next decade, this coastal strip could end up hosting the world’s two largest refineries. Local farmers have already become dollar millionaires as the two oil rivals avidly buy up more and more farmland surrounding their plants, often paying more than three times the going rate.

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