The quest to add capacity to India’s strategic oil reserves – a crucial drawback in times of war and supply disruptions such as the current closure of the Strait of Hormuz – has been burning in Odisha’s Jajpur district for more than a year.
On April 8, 2025, a Memorandum of Understanding (MoU) was signed between the Government of Odisha and the Indian Strategic Petroleum Reserves Limited (ISPRL) to set up a four million metric ton crude oil storage complex at Dhankari Hills in Jajpur. However, to date, the land is yet to be handed over to ISPRL, a special purpose vehicle under the Federal Ministry of Petroleum and Natural Gas, which is implementing the project. The reason: Illegal quarrying has continued at the designated site for several months, potentially undermining its viability.
Officials in the state Ministry of Industry admitted that large-scale extraction of black stone, which is widely used in road construction, continues unabated in the region with more than a dozen such quarries operating in the project area. “The district administration is supposed to hand over the area to ISPRL, but they have not been able to take any concrete steps in this regard,” a senior official of the industry department said. HT also reviewed the chain of communication between ISPRL and the state government on the matter with the former expressing concern over the delay in handing over the land.
India’s current strategic oil reserves located in Visakhapatnam (1.33 million metric tons), Mangaluru (1.5 million metric tons) and Badur (2.5 million metric tons), contain a total of 5.33 million metric tons of crude oil, Oil Minister Hardeep Singh Puri said in Parliament. This equates to about 9.5 days of the country’s needs or about 77 days of net imports. ISPRL plans to increase spare capacity to 15 million tons over the next decade, in line with India’s ambition to join the International Energy Agency (IEA), which requires member states to hold crude stocks equivalent to 90 days of consumption.
The Jajpur project, along with a parallel facility in Badur, Karnataka state, is designed under the Strategic Petroleum Reserve Program Phase II to increase capacity to 11.83 million metric tons, narrowing the gap with the IEA standard. Designed as underground rock caverns, the oil reserves connect directly to nearby refineries and augment the commercial inventory held by oil companies, serving as a critical cushion during supply disruptions. Officials at the state Industry Ministry acknowledged that the plan was now in limbo even as Iran closed the Strait of Hormuz, through which nearly 20% of the world’s crude oil supplies flow daily, after US and Israeli strikes killed Iran’s supreme leader.
ISPRL officials said the agency has deposited more than $21 crore for 400 acres of land in Dhankari Hills with Industrial Infrastructure Development Corporation. However, the response to the Right to Information (RTI) request, dated January 31, 2026, from the Jajpur district administration confirmed that no land had been transferred to the ISPRL.
“We have repeatedly written to the district and state authorities since March 2025 seeking intervention. We have warned that quarrying within the project limits will disturb the topographical integrity of the area and will have an adverse impact on the viability of the project,” said an ISPRL official, requesting anonymity, in a letter dated November 2025 to the Jajpur district magistrate. Last month, ISPRL wrote to Dharmasala MLA Liku Sahu asking him to intervene in stopping black stone quarrying in the project area as it is a matter of national security and energy safety.
Jajpur district collector Ambar Kar did not respond to calls as well as messages from Hizb ut-Tahrir on why the land was not handed over to ISPRL.
