Rajasthan state government and Hindustan Petroleum Corporation (HPCL) have formed a joint venture (JV) to build an oil refinery project at Barmer in India at a cost of Rs. 43,129 crore ($6.73bn) on 21st August 2017. An agreement in this regard was signed by the two parties after receiving an approval from the Indian government to go ahead with the planned 9 million metric tonne crude Barmer Petroleum Refinery-cum-Petrochemical Complex. The new joint venture company named as HPCL Rajasthan Refinery (HRRL) will have the Indian state-owned oil and natural gas company HPCL owning a 74% stake in partnership with the Rajasthan government which will hold a stake of 26%.
The agreement signed in the presence of oil minister Dharmendra Pradhan and Rajasthan chief minister Vasundhara Raje entitles the company to a viability gap funding of Rs1,123 crore a year for 15 years from the year of commercial production. The funding will be in the form of an interest-free loan to be refunded in subsequent 15 years. The project includes a petrochemicals complex too. The proposed refinery will be able to process local crude from Vedanta Ltd’s Barmer oil field in the state as well as imported crude. Vedanta, which recently merged its group company Cairn India Ltd with itself, is planning more investments into enhanced oil recovery from its Barmer assets. Anil Agarwal, chairman, Vedanta Group had last December said the group was committed to investing Rs30,000 crore to add 100,000 barrels of oil and oil equivalent over the next three years, primarily from its prolific Rajasthan fields.
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