BHUBANESWAR: The long-delayed crude oil reserve at Chandikhol in Jajpur district has received a major boost following the signing of strategic collaborative agreement between the Indian Strategic Petroleum Reserves Limited (ISPRL) and Abu Dhabi National Oil Company (ADNOC) during Prime Minister Narendra Modi’s visit to the UAE.
The agreement has revived hopes for faster implementation of the rS 8,743 crore underground oil storage facility in the state. The project envisages potential ADNOC crude oil storage of up to 30 million barrels in India’s strategic petroleum reserves (SPR), including participation in facilities at Visakhapatnam and the proposed reserve complex at Chandikhol.
The Chandikhol SPR project had remained stalled for nearly eight years due to land acquisition and statutory clearance hurdles. It has now moved back into focus as India looks to strengthen its emergency crude reserve capacity to tide over energy security concerns in the wake of the West Asia conflict.
Approved by the Union cabinet on June 17, 2018, the Chandikhol project aims to create a 4 million metric tonne (MMT) underground crude oil storage facility, making it the country’s largest strategic petroleum reserve site. Once completed, the facility will substantially augment the country’s energy security buffer and strengthen the eastern coast’s role in the national petroleum logistics network.
The project witnessed limited progress despite initial approval. Momentum returned to the project after signing of a tripartite agreement between the Industrial Promotion and Investment Corporation of Odisha Limited (IPICOL) and ISPRL on April 8, 2025, in New Delhi in the presence of Union Petroleum minister Hardeep Singh Puri, Chief Minister Mohan Charan Majhi and Union Education minister Dharmendra Pradhan.
Official sources said the state government has since accelerated the process of transferring required land by executing lease deeds in favour of ISPRL, the executing agency.
India currently maintains strategic petroleum reserves of 5.33 million tonne at Visakhapatnam, Mangaluru and Padur, equivalent to nearly 38 million barrels of crude oil. With ADNOC’s proposed participation, the combined reserve capacity linked to the India-UAE partnership could rise to 68 million barrels.
Energy sector analysts said the Chandikhol facility will emerge as a critical strategic and commercial storage hub on the eastern coast, especially given its proximity to Paradip port, refinery infrastructure and expanding petrochemical investments in the region.