Jaipur: Notwithstanding the fact that Barmer district of Rajasthan ranks second in crude oil production in the country, setting up a crude oil refinery here appears to be a distant dream.

Though Rajasthan government has made an agreement with Bharat Petroleum but no arrangement has been made for setting up with the refinery. In his efforts to establish the refinery, Rajasthan Chief Minister Ashok Gehlot discussed the issue with the Central government and also met Prime Minister Manmohan Singh and Petroleum Minister Jaipal Reddy.

After much hue and cry created over this issue, setting up of refinery still lies in lurch.

The state government also spoke with Oil and Natural Gas Corporation Limited (ONGC) and Vedanta but it could not yield any result.

According to sources, ONGC has asked for concessions like sales tax, interest-free loans and other concessions from the state government for setting up of the project.

The government, however, is thinking over the demands by ONGC. Meanwhile, Chairman of Vedanta Group Anil Agrawal has shown interest in setting up of the refinery in the state. Majority of shares in Barmer oil field is with Cairn India which will be purchased by Vedanta group soon as the latter has already initiated talks to buy them.

The public sector owned ONGC has 30 percent of shares in it. The production of crude oil in this region started from August 2009. Presently, 1.45 lakh barrels crude oil is produced every day which is expected to reach 2.40 lakh barrels soon.

The crude oil reserves are such in this area that it can be exploited for next 40 years. Keeping this in mind, the state government wants to set up a refinery here. Through this, Rajasthan will not only progress in the industrial sector but it will also increase the government’s exchequer.

At the same time, this will also provide indirect or direct jobs for people in the state.