State-owned Oil and Natural Gas Corp is planning to set up a Rs 4000 crore (Rs 40 billion) refinery in Barmer in Rajasthan, the site of recent oil discoveries by Cairn Energy of UK.
"We are talking to Cairn Energy to jointly set up the refinery," ONGC chairman and managing director Subir Raha told PTI in an interview.
The refinery is planned to have an initial capacity of 5 million tonnes per annum and would process the heavy crude oil find of Cairn Energy in Block RJ-ON-90/1 in Rajasthan.
Raha said equity holding in the refinery project was being discussed with Cairn.
Cairn Energy has so far discovered 1084.1 million barrel (or 156.2 million tonnes) of in place reserves of which 286.45 million barrels (or 41.87 million tonnes) are recoverable. The present discoveries would produce upto 3 million tonnes per annum but the output would rise with new finds being made.
ONGC holds 30 per cent interest in Cairn's two oil fields in the block.
"Talks (with Cairn) are in progress and investment plans will be firmed up soon," he said.
Raha said ONGC was also studying the possibility of raising the capacity of its subsidiary Mangalore Refinery and Petrochemicals Ltd to 30 million tonnes.
"MRPL is running at 12 million tonnes currently and its capacity is planned to be raised to 15 million tonnes by 2007 through debottlenecking. Further, we are studying the prospect to double the capacity to 30 million tonnes," he said.
Raha said MRPL has a rated capacity of 9.69 million tonnes per annum but was currently processing one million tonnes of crude every month (12 million tonnes annually).
