Centre may offer Rajasthan refinery stake to Vedanta
11 October 2010
The government is likely to offer a significant stake in its proposed refinery project in Rajasthan to UK-based Vedanta Resources, according to a report. Vedanta is looking to enter the crude oil business in India by acquiring majority stake in Cairn India, which controls the nation's largest onshore oilfield in Rajasthan.
While Vedanta would fit into the central and state governments' scheme of things as a lead investor in the proposed refinery, it would be an opportunity for the London-listed mining major to integrate Cairn India's crude production with the much-needed refining capacity, says The Financial Express report, which has not been attributed to any particular source.
The refinery project, for which state-owned ONGC is already doing feasibility studies, is conceived to have the capability for processing the high-residue crude from Cairn's Barmer field in the state.
The petroleum ministry is expected to probe whether Vedanta would be keen to invest in the project while processing Cairn Energy Plc's application for clearing its majority stake sale to Vedanta for $9.6 billion. It is yet to be decided if the offer is to be overtly presented as a condition for clearing the deal.
''There has to be some give and take,'' the paper quoted an unnamed government functionary as saying while referring to the proposed offer.
Vedanta already has significant presence in Rajasthan, where its Zinc production facility is located, and is the largest tax payer and one of the largest employers in the state. ''We, as well as the Rajasthan government, would be happy if they (Vedanta) could bring in 100 per cent foreign direct investment into the project,'' the functionary said.