New Delhi, April 20: Oil India Ltd (OIL) is expected to drill an oil well under a pilot project in the Baghewala block in Rajasthan in August this year for exploitation of the heavy oil discovered in the block.

Petroleum minister Mani Shankar Aiyar said today the project was being implemented in co-operation with PDVSA, the Venezuelan national oil company.

Aiyar said Venezuela?s energy minister would also be present at the ceremony to mark the drilling of the first well at the oilfield. He said a team of officials would soon visit Venezuela to discuss the modalities of the project with PDVSA.

Oil India had earlier discovered the heavy oil in the Baghewala block. Venezuela, on the other hand, is a pioneer in the technology to commercially exploit heavy oil resources.

The minister also said Oil and Natural Gas Corporation Ltd and Cairn Energy were in talks to set up a refinery in Rajasthan.

Full capacity utilisation of the proposed refinery would require the two companies to use the crude available in Rajasthan as well as source it from outside, Aiyar added.