Refinery order next month

The government will decide next month on the public sector oil company that will be given the task of setting up a refinery in Rajasthan.

According to a proposal submitted to the ministry, the refinery may also process imported crude oil apart from indigenous supplies from Cairn Energy.

Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Oil and Natural Gas Corporation (ONGC) have made proposals to the state government for setting up the refinery. The petroleum ministry will have a final say on the issue.

Speaking to reporters, Petroleum Secretary SC Tripathi said IOC was initially interested in transporting the crude oil discovered by UK-based Cairn Energy through a pipeline.

Under the production-sharing contract signed for the block, Cairn Energy will be required to sell crude oil to a government-designated agency, which in this case is IOC.

Among the proposals being examined by the ministry, Tripathi said one option was to transport the crude oil through a pipeline to Kandla in Gujarat and then to Mangalore for refining. Cairn and ONGC had suggested that this could be done till the time the refinery was not ready.

Tripathi said it was also suggested that the refinery's capacity could be 5 million tonnes, which could be enhanced by 5 million tonnes for processing imported crude oil.

ONGC has a 30 per cent share in Cairn Energy's commercial oil and gas find in Rajasthan. Cairn Energy's Mangala oil field is considered to be the biggest discovery in India after Bombay High.

Cairn Energy is involved in exploration across a 4,970 square km block in Rajasthan's Barmer region. It owns the total equity of the block, while ONGC has the rights to 30 per cent of any development area resulting from a commercial discovery. The first stage of commercial oil production from RJ ON 90/1 block, held by Cairn Energy, is scheduled in another two years.