HPCL may setup Oil refinery in Barmer

State-owned Hindustan Petroleum (HPCL) has expressed interest in setting up a 9 million tonne unit at the site of the massive oil find at Barmer district after ONGC deterring from building a refinery in Rajasthan, HPCL, which owns a refinery at Mumbai and Visakhapatnam in Andhra Pradesh and is equal partner in the just commissioned Bhatinda refinery in Punjab, is keen to take up the project, sources privy to the development said. Oil and Natural Gas Corp (ONGC), which owns 30 per cent interest in the Barmer oilfields of Cairn India, had in 2005 committed to building the refinery but later started soft- peddling the project. Cairn India, which holds 70 per cent interest in the fields, currently produces about 175,000 barrels per day oil (8.75 million tonnes a year) from the Rajasthan fields and has potential to go up to 300,000 bpd (15 million tonnes).
Production from Mangala oilfield, the largest of the 24 finds in the block, started on August 2009 and currently Mangala, Bhagyam and Aishwariya fields are producing about 175,000 bpd. As per the financial analysis of the merchant banker, the project was not viable on standalone basis and required interest free loan of approximately Rs 1,100 crore per annum for 15 years from Rajasthan government as per ET.