The Hindu Business Line : Rajasthan refinery: ONGC, IOC, HPCL asked to submit proposals

Mr S.C. Tripathi, Secretary, Ministry of Petroleum and Natural Gas, flanked by Mr M.K. Sanghi (right), President, Assocham, and Mr Anil K. Agarwal, Alternate President, at an interactive session with businessmen in the Capital on Friday. — Kamal Narang

New Delhi , May 6

THE Government has asked ONGC-Cairn combine, IOC and HPCL to submit their proposals to set up a refinery in Rajasthan, said Mr S.C. Tripathi, Petroleum Secretary.

Speaking to newspersons on the sidelines of an interactive session organised by Assocham, he said: "We have asked all of them to make their detailed proposals by June."

Cairn Energy has discovered more than 500 million barrels of proven reserves in Barmer district of Rajasthan and hopes to begin production from October 2007.

ONGC has 30 per cent stake in Cairn Energy's Rajasthan oilfields.

ONGC, through its subsidiary, MRPL, and Cairn Energy of UK want to set up refinery in Barmer district.

On the other hand, IOC is claiming rights over the crude produced from Cairn fields in Rajasthan by virtue of being the Government-nominated agency for marketing the crude.

IOC wants to either pipe it to its Panipat refinery in Haryana or set up a wellhead refinery in Rajasthan.

Besides IOC, HPCL is another claimant to setting up the refinery in Rajasthan as it has plans for one in Punjab.

It also feels that a refinery by either IOC or ONGC-Cairn would dampen the prospects of its Bhatinda refinery.

For the period during which no refinery can be set up, the Secretary said that there were two proposals of either carrying the crude to Panipat or transporting it through a pipeline to Kandla port in Gujarat and further shipping it to MRPL for processing.

Mr Tripathi said that the pipeline used for carrying crude to Kandla for further processing at MRPL could be used to import crude oil for processing at a 7-8 million tonnes refinery in Rajasthan.

On the building of strategic reserves facilities, he said that the issue is before the expenditure finance committee. The Government proposes to start work on it next year.

It has identified Mangalore and Visakhapatnam to build three tanks to store emergency crude oil stocks of five million metric tonnes per annum (mmtpa).

In January 2004, oil security plan to ensure supplies for up to two weeks during emergencies was approved.

The Indian refineries currently have a crude storage capacity of 5.7 million tonnes, which may be enough to meet domestic demand for oil products for 19 days.

With the setting up of the facilities, the country would be able to storage petroleum products for 90 days.

Mr Tripathi also indicated that the proposed Petroleum and Natural Gas Regulatory Board, when constituted, is likely to have a separate set of norms for natural gas sector.

The Government proposes to introduce a Bill for the same in the next session of Parliament.

`High global oil prices here to stay'

THE high international oil price scenario is here to stay and the period of soft oil prices has gone, according to Mr S.C. Tripathi. The upward movement in the oil prices has put pressure on domestic fuel prices.

However, he refrained from commenting if petrol and diesel prices would be raised in the immediate future.

The Secretary said that the Government was in the process of building consensus on the price rise to be passed on to the consumers.

Mr Tripathi also said that prices in India couldn't go up very high.

The next price revision as per the practice of adjusting petrol and diesel prices with international changes every fortnight is due on May 15.

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