Barmer oil refinery set to change profile of Rajasthan's Thar desert

Close on the heels of the world’s largest integrated solar energy park in Jodhpur and power generation from wind and sunlight in Jaisalmer gathering momentum, Barmer refinery project will give a boost to the economic prosperity of Rajasthan, especially in the backward desert region of the state.

This ambitious Rs 37,229 crore refinery will be the largest investment in the state after Indira Gandhi Canal which is all set to change the profile of the Thar desert. Simultaneously, with the auxiliary industries, the refinery is expected to create nearly a million of direct and indirect employment opportunities to the people of state as well as development of infrastructure in the region.

Congress president Sonia Gandhi laid the foundation stone for the 9 million tonnes capacity oil refinery and petrochemical complex at Barmer in Rajasthan on Sept 22 fulfilling a long cherished dream of the people of Rajasthan. This initiative will give new wings to state’s developmental aspirations and no more be treated as a backward state.

After nearly five decades of search, the huge reserves of oil and gas have been discovered in Barmer district. The availability of crude oil is estimated at 900 million tonnes. Almost 9 million tonnes of crude oil is being produced annually in the state totaling about 20 per cent of the domestic production of crude of the country. In future it is expected to go up to 15 million tonnes per annum with Rajasthan accounting for 35 per cent of the country's total domestic crude production.

At present, 1.75 million barrels per day of oil is being produced by Cairn India Ltd in Barmer. Thus, after the Maharashtra (2.25 million bpd), Rajasthan is the country’s second largest oil producing state. And the day is not far when Rajasthan will become India’s top oil producing state. British company Cairn India plans to invest around Rs 330 billion to develop the oil rich Thar.

Chief Minister Ashok Gehlot had set his eyes on the refinery project for a long time. Soon after assuming power as chief minister had set up a committee under the chairmanship of former Union Petroleum Secretary S C Tripathi to conduct a viability assessment of the refinery as the previous government had almost given up on the project citing viability concerns. The committee gave a positive report and state government accepted the recommendations of the committee and assured that it will provide all necessary facilities to investors and other stake holders.

Industrial complex

Refinery is called the mother of all industries. Petro chemical refinery in Barmer would strengthen the petrochemical, petro-engineering, petro-medicine research, heating oil industries, polymers, plastics etc. Naphtha is produced from crude oil which is used in the formation of petrol. Simultaneously diesel, kerosene and aviation fuel (gasoline) will be produced here and wax, asphalt and other petroleum-based hydrocarbon products are also being produced.

This largest industrial complex will provide large scale employment opportunities to youth of the state.  Already farmers have started reaping the benefits from the project with the land prices in this earlier god forsaken place soaring following the announcement of the project.

The land allotted for the refinery is in Pachpadra- Baytu region of Barmer district. Mineral and petroleum minister of the state Rajendra Pareek points out that HPCL share has been the highest percentage in the refinery. In future the state government, ONGC, Engineers India Ltd., etc. are expected to be involved in this project.

This would be the 26th refinery of the country. According to experts, Barmer refinery will be an ultra-modern refinery and these 90 million tonne of annual production capacity refinery will be based on the wax oil technology. Starting with an investment of Rs 40,000 crore, it is expected to go up to Rs one lakh crore in the next decade.

The neighbouring states like Uttar Pradesh, Haryana, Punjab and Madhya Pradesh will be major markets for petro productions. The Barmer refinery would reduce the cost of transportation of petroleum products to these states considerably.

Currently, Rajasthan is raking in Rs 5000 crore in royalty from oil exploitation; after the refinery becomes fully operational the state’s annual expected revenues of royalty  would be in the region of Rs 13, 000 to 15,000 crore. The state government, on its part, has to give annually Rs 3,376 crore financial Incentive package to HPCL for 15 years for  establishing this refinery. Besides, the state will provide free land, water, and financial help for infrastructure development.

Another bonanza for Rajasthan is in the pipeline. Nearly 40 per cent of the much talked about Delhi-Mumbai Industrial Freight Corridor (DMIC) will pass through Rajasthan. The corridor, once it becomes operational, will benefit the state’s cotton, woolen garments, synthetic sugar, cement, zinc, chemicals, fertilizers, automobiles and stone-cutting industries, hopefully leading to rapid development.

Ashok Gehlot, who had earlier planned a more modest 4.5 million capacityrefinery, is now happy that the Union petroleum ministry insisted on doubling the capacity keeping the future needs in mind. The refinery project is bound to prove a milestone in the development of the state and the country.