The petroleum ministry has nominated Oil and Natural Gas Corporation Limited and its subsidiary, Mangalore Refinery and Petrochemicals Ltd, to get the crude oil from Rajasthan oil fields.
Cairn Energy operates the field, which is one of the largest onshore oil discoveries in the past 25 years. ONGC has a 30 per cent stake in it.
"The integrated company is optimistic that a favourable decision will soon be awarded for a 7.5 million tonne,well-head refinery to be set up at Barmer for processing crude oil jointly by ONGC and Cairn," said a company release.
Besides the ONGC-MRPLCairn combine, Indian Oil Corporation and Hindustan Petroleum Corporation had also submitted project proposals for setting up a refinery in Rajasthan.
The ministry had set up a committee, with representation from the directorate-general of hydrocarbons and the Centre for High Technology under the ministry's Petroleum Planning and Analysis Cell, to decide on the three proposals. It had earlier rejected the IOC's proposal for a 5 mt refinery.
ONGC had proposed setting up a 7.5 million tonne refinery at Kausaria in Barmer at a cost of Rs 7,967 crore (Rs 79.67 billion). ONGC had proposed that its refinery would be designed to handle the crude available locally and also Arab Mix in equal quantities.
Cairn Energy has discovered 2.5 billion barrels of oil reserves in the Barmer district but considering the waxy quality of this crude ONGC proposed a blend ratio of 50 per cent.
Cairn announced six oil discoveries in 2004, which included three northern fields of Mangala, Aishwariya and Bhagyam. Cairn hopes to start crude oil production from its southern fields in the block by the middle of 2006.
Refinery stakes
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