India Bets on Private Funds for Massive Oil Reserve

India is accelerating efforts to expand its strategic oil storage capacity by seeking private investment for its largest petroleum reserve. This new facility, planned for Chandikhol in Odisha, will have a capacity of four million tonnes of crude oil and is estimated to cost ₹8,571 crore. The project aims to increase India's existing strategic petroleum storage by 80% and is being developed under a public-private partnership model.

The government is actively encouraging private participation by offering a grant of up to Rs 5,142 crore. Bids for the Odisha project are due by February 26, 2027. This initiative is a response to the nation's vulnerability to supply shocks, highlighted by past disruptions through the Strait of Hormuz.

In parallel, India is looking to lease out half of its Visakhapatnam strategic reserve. This move, along with plans for new reserves in Mangaluru, underscores India's commitment to bolstering energy security amidst global transit challenges. The Odisha project at Chandikhol has been a long-term plan, with land acquisition nearing completion. The government's commercial model aims to limit its financial burden while ensuring the reserve's development.