In what could give a new lease of life to the project, the Rajasthan Government has agreed to pick up 26 per cent stake in the proposed Barmer refinery to be set up by Oil and Natural Gas Corporation (ONGC).
Giving this information here, Minister of State for Petroleum and Natural Gas Jitin Prasada said the Rajasthan Government had been pressing for a 9-12-million tonne refinery at Barmer after Cairn India found 6.5 billion barrels of reserves that could produce 1.75 lakh barrels per day (8.75 million tonnes a year) of oil at plateau.
State-owned ONGC, which owns 30 per cent stake in the Cairn's oilfields, had originally proposed the project but later changed its mind stating that the project was not feasible in the absence of any kind of fiscal incentives by the State Government. “ONGC is in consultation with the Rajasthan Government on the feasibility of setting up a commercially viable refinery at Barmer,” Mr. Prasada said in a written reply to a question in Rajya Sabha.
He said the State Government had indicated to take up 26 per cent stake in the proposed refinery, a condition an expert group headed by former Oil Secretary S. C. Tripathi had laid for making the project viable. The State Government is also in talks with Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Limited (BPCL) for a possible marketing tie-up .
However, he said ONGC had said that a decision on setting up the refinery would be based on a detailed feasibility study and financial appraisal, bankable marketing agreement for the offtake of products and adequate fiscal incentives from the State Government to meet the viability gap.
