Rajasthan, ONGC to resume talks on Barmer refinery

Hopes on setting up a refinery in Barmer have once again revived with the Rajasthan government set to hold fresh rounds of negotiations with Oil and Natural Gas Corporation (ONGC). Barmer is the area where oil finds have been made in the recent past.

"We are working out the modalities of negotiations. The talks are slated to be held soon," a senior state government official said.

He said since ONGC renewed its interest in the project over a month ago, the government had started the groundwork in holding talks with ONGC.

According to sources, the state government might rope in Subir Raha, former ONGC chairman, as a mediator from its side while negotiating with ONGC. The government is also mulling appointing him as a consultant.

"His name has been cleared by the mines minister. Now the file is pending with the chief minister and Raha may soon be appointed as advisor to the state government in petroleum matters," the official said.

During Raha's tenure the project got the green signal from ONGC and he is familiar with the project.

It may be mentioned here that ONGC had earlier dropped the idea of setting up a refinery in Barmer because according to it, the project was uneconomical.

After pressures from various quarters, it forwarded a list of concessions and rebates to state government saying that Rajasthan crude was heavy and viscous.

However, the state government found the demands to be unrealistic. "The refinery is of Rs 12,000 crore while the concessions sought were worth Rs 21,000 crore," the official said.

"Now as they have again shown interest in the venture, we are ready to offer the best we can," he added.

Meanwhile, the Rajasthan government is planning to offer 50 per cent partnership in the petroleum corporation, which is to be formed soon, to the private sector.

Sources in the state government said the government proposes to invite letter of intents from the companies desirous to be part of the venture and who have an experience in the petroleum sector.

"The government has already initiated the process to register the corporation under the Companies Act. And once it is done, the government would invite companies to submit their proposals for being part of the venture," a source added.

The petroleum corporation would be launched with an Rs 5 crore corpus, which would be equally shared by the government and the private company. Likewise any increase in it would be shared equally by the two.