Vedanta Resources is planning to acquire a majority stake in a refinery being set up in Barmer in western Indian state of Rajasthan.

The refinery, which is being built at an estimated cost of Rs. 2 billion, will have a capacity of 9 million tones a year. The company had acquired a controlling stake in Cairn Energy for $ 8.7 billion, which produces 1.75 lakh barrels a day from facilities in district of Barmer. The company had also acquired a 24.5 per cent stake in Raykal Aluminium Company Private Limited for Rs. 200.7 crore.

State-run ONGC was to build the refinery and the project was left pending. HPCL had expressed interest in building the refinery and proposed to acquire 51% stake in the project. ONGC is expected to hold a 26 per cent stake while EIL will hold a 5 per cent stake in the proposed refinery. The remaining stake will be held by state government and Vedanta Resources.

The group's Cairn India unit is planning to invest additional $ 6 billion to increase production of crude oil in the next two years by 71 per cent and account for one-third of India's production by 2018. However, the company wants to expand its contract for the Rajasthan block for the additional investment.