Crude oil produced in Barmer will be cheaper now!

With the establishment of a refinery in Pachpadra, the crude oil exploited in Barmer-Sanchore Basin will be cheaper after refining. 

Right now the crude oil is being sent to Gujarat and Panipat Refinery from  Mangla Oil Field of Kawas through pipeline for getting refined but now HPCL will have to lay off only seventy-km pipeline from Mangla oil field to Pachpadra refinery.

At present, it costs one-and-a-half-dollar per barrel for sending the oil to refinery. Two lakh barrels of crude oil is being produced in Barmer and sent to Gujarat every day. Sixty to seventy percent of the crude oil produced in Barmer is supplied to Reliance refinery.

The remaining oil is supplied to Essar, IOC and HPCL’s Jamnagar, Koyali and Panipat refinery. Till now, Reliance was the biggest buyer of Barmer’s crude oil, but HPCL will become the biggest buyer when the refinery starts in Pachpadra.

Cairn India will have to send the crude oil to Pachpadra refinery situated at a distance of 70 km, instead of Jamnagar-based refinery situated at about 700 km away. With this, cost of  oil transport for refining will reduce to 10 percent. This will reduce the cost of refining crude oil produced in Barmer.

At the same time, the benefit of sales tax of nearly 400crore that the Gujarat government gets every year from Cairn India, will now be transferred to Rajasthan government. Also, the Rajasthan government will get 12,000 crore rupees annually by refining the oil in Barmer and sending it for sale.

Although oil is being produced in the Barmer basin for last nine years and this basin contains crude oil reserves for next twenty years, Cairn India is now going to drill more than five hundred new oil wells. The company’s experts are expected to get huge oil reserves in excavation of wells. Seismic surveys have also found signs of getting oil reserves.

Geologist and Head of Department of Geology Department of Jainarayan Vyas University of Science, Professor Suresh Kumar Mathur has also expressed the possibility of getting huge oil reserves in the Barmer basin in one of his research papers. With the expectations of getting oil,  Pachpadra refinery can prove to be a beneficial deal for HPCL and Rajasthan government.

The benefit...

• The benefit of sales tax of nearly 400 crore that the Gujarat government gets every year from Cairn India, will now be transferred to Rajasthan government. Also, it will get Rs 12,000 cr annually by refining oil in Barmer.