Essar rivalry behind Reliance deepwater row

Vol 6, PW 9 (03 Jul 02) Exploration & Production

CONSPIRACY THEORISTS BLAME Reliance's longstanding rival Essar Oil for its problems with the environment ministry.

Why Essar's plan for a 10.5m t/y refinery at Vadinar, adjacent to Reliance's 27m t/y refinery at Jamnagar, is blocked in court, allegedly by Reliance backing for NGOs trying to block it. "Reliance is getting a taste of its own medicine," we are told.

"It should not complain." Shastri Bhawan gossip believes the Ruia family controlling Essar Oil is hitting back at Reliance through environment minister T.R Baalu.

Both Baalu and the Ruias have links to Chennai. More, an anonymous letter to the environment ministry alleges that Reliance's drilling in KG-DWN-98/3 will destroy marine life and harm the environment.

Is it pure coincidence that Essar's Vadinar refinery is grounded by similar allegations Clearly, Reliance was overconfident or ill advised. An expert tells us the company should have quoted the Environmental Protection Act to avoid trouble and should have written a polite letter to the environment ministry saying it does not need its permission to drill because the Act does not cover India's offshore exclusive economic zone.

Or it could have informed the environment ministry of its drilling plans and pointed out that the mandatory 120-day waiting period is over. "They did neither and are now desperately flailing their arms and legs," we are told.

"Reliance is filled with ex-government officials. Today it's more like a government organisation where the right hand doesn't know what the left is doing."