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Rajasthan to set up oil arm with private sector

business Updated: Apr 25, 2007 17:40 IST

IANS
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The Rajasthan government will soon form a company to explore oil and gas in the country and float a tender to invite the private sector to acquire 50 per cent stake in the new venture, officials said.

"We propose to invite letters of intent from companies with experience in the petroleum industry to be a part of the venture. The process has been initiated to register the venture under the Companies Act," a senior official said.

"Once this is done, interested companies would be invited to submit their proposals for being part of the venture," the official told the media, adding that the new company would have a seed capital of Rs.50 million.

A general decision to set up the corporation was taken at the state's cabinet meeting on April 2.

"The setting up of Rajasthan State Petroleum Corp will ensure our partnership in exploration, exploitation, transportation and distribution of petroleum in the state," Rajasthan Mines Minister LN Dave said.

He said the new company would go for both upstream and downstream projects in the hydrocarbons business.

Meanwhile, Oil and Natural Gas Corp (ONGC) has once again rekindled hopes for a refinery project in the Barmer district of Rajasthan where Britain-based Cairn has made recent oil discoveries.

Sources in the state government said that ONGC is now ready to hold fresh round of talks with the state government in this regard. The matter is being keenly pursued by Chief Minister Vasundhara Raje.

This meeting is slated to take place next month, sources said, adding that former chairman and managing director of ONGC Subir Raha may be associated with the project as an advisor and consultant for the project.

The project had received the green signal during Raha's tenure at ONGC, but the project was later dropped since it was thought to be commercially uneconomical, officials said.