Maharashtra puts land purchase for Saudi Aramco's $44-bn refinery on hold

Maharashtra has put on hold the process to buy land for the country's biggest oil refinery that state-run oil companies are building with Saudi Aramco, Chief Minister Devendra Fadnavis said, after strong opposition from farmers.

The $44 billion refinery was seen as a game changer for both parties - offering India steady fuel supplies and meeting Saudi Arabia's need to secure regular buyers for its oil.

But thousands of farmers are refusing to surrender land, fearing it could damage a region famed for its Alphonso mangoes, vast cashew plantations and fishing hamlets that boast bountiful catches of seafood.

"The entire (land acquisition) process has been stayed. We haven't acquired any land," Fadnavis told state assembly on Wednesday as opposition parties and a coalition partner Shiv Sena were opposing the refinery.

The Ratnagiri Refinery & Petrochemicals Ltd (RRPL), which is running the project, says the 1.2 million barrel-per-day (bpd) refinery, and an integrated petrochemical site with a capacity of 18 million tonnes per year, will help create direct and indirect employment for up to 150,000 people, with jobs that pay better than agriculture or fishing.

RRPL, a joint venture between Indian Oil Corp (IOC), Hindustan Petroleum and Bharat Petroleum, has said suggestions the refinery would damage the environment were baseless.

Issues related to the land for the refinery will be sorted out by the state government soon given the importance of the project, RRPL Chief Executive officer B. Ashok told Reuters.

Land acquisition has always been a contentious issue in rural India, where a majority of the population depends on farming for their livelihood.

In 2008, for example, Tata Motors had to shelve plans for a car factory in Singur, West Bengal after facing widespread protests from farmers.