This revised MoU was signed in the presence of Chief Minister Vasundhara Raje and Union Petroleum Minister Dharamendra Pradhan.
Earlier, a MoU was signed with HPCL to establish a refinery-cum-petrochemical complex in Barmer in 2013 by the then Ashok Gehlot government. However the present Vasundhara Raje government considered it to be a loss-making agreement for the state government.
As per the Gehlot government's MoU, Rajasthan was given 26 percent partnership in the project with the viability gap funding (VGF) payment worth Rs 60,000 crore.
The present state government claims that it re-negotiated the agreement, which resulted into the burden of setting-up the refinery on Rajasthan government.
"On the other hand, the earlier 2 pc return of investment for the state government was now estimated to be almost 12 percent," claimed state government officials.
"This would be the biggest ever investment project in Rajasthan amounting to Rs 43,129 crore. Another Business Transfer Agreement was signed between Rajasthan State Gas Ltd (RSGL) and GAIL Gas Ltd for distribution of piped domestic gas in Kota City," said a statement issued by the state government.
"Efforts would now be made to ensure that the work on refinery gets started as soon as the monsoon season ended," Raje said.
The Chief Minister said that Rajasthan was producing one-fourth of the total crude production in India and thus establishment of this refinery would be beneficial for the state. This project would act as an anchor industry for the entire state and particularly western Rajasthan, she added.
Pradhan said that as per the agreement, total investment worth Rs 43,129 crore would be made in establishing this refinery. On the other hand, Cairn Energy would make investment of another Rs 27,000 crore in next four years to increase oil production.
"After securing all approvals and clearances, the work to set-up the refinery would start within this financial year," he added.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)