ONGC plans new refineries in AP, Rajasthan

Oil and Natural Gas Corp, India's largest oil producer, plans to set up new refineries at Rajasthan and Kakinada in Andhra Pradesh, Petroleum Minister Mani Shankar Aiyar said on Thursday.

ONGC, which produces more than 75 per cent of the country's crude oil production of 34 million tonnes, already has 9.69 million tonnes Mangalore Refinery and Petrochemicals Ltd under its folds.

"ONGC has indicated its interest in setting up a refinery in Rajasthan and an export-oriented refinery in Kakinada. This could also be done in association with MRPL, which is a wholly owned subsidiary of ONGC," Aiyar said in a written reply to a question in the Lok Sabha.

The company has teamed up with Cairn Energy of UK for setting up of a 7.5 million tonnes refinery at Barmer district of Rajasthan where the British firm has discovered 1.2 billion barrels of oil reserves.

State-owned Indian Oil Corp and Hindustan Petroleum Corp Ltd have also expressed interest in setting up a well-head refinery at the site of oil discovery in Rajasthan.

"These companies have approached the government to designate them as the nominee for puchase of oil from (Cairn Energy's) block RJ-ON-90/1," he said adding the Centre was examining the proposals of the three companies.

ONGC, he said, has tied up with Kakinada Seaports Ltd and Infrastructure Leasing and Financial Services for the development of a port-based special economic zone at Kakinada and setting up an export-oriented refinery project.

Aiyar however did not give the investments details of the two ventures.

"In addition to their areas of core competence, ONGC have been exploring options for diversification of their activities by forward and backward integration. In this endeavour, the company has been advised to explore the feasibility of setting up the export-oriented refinery at Kakinada through MRPL," Aiyar said.