Government assures refiners for Cairn’s crude
August 29th, 2009 - 8:24 pm ICT by IANS
Barmer (Rajasthan), Aug 29 (IANS) The government Saturday sought to allay the fears of Cairn India, which started pumping oil from its Rajasthan fields, that it may not find enough refiners for its crude once the production reaches peak levels.
“The production sharing contract had enough contingency measures to cover all such issues,” Director General of Hydrocarbons V.K. Sibal told reporters at the launch of a new oil field here.
“We will ensure the crude is refined.”
According to Cairn, the peak output from its Rajasthan fields, including the Mangala wells that was inaugurated by Prime Minister Manmohan Singh Saturday, will amount to 175,000 barrels per day (bpd) - as much as 20 percent of India’s domestic production.
But the company has contracted with only two refiners at present - Indian Oil Corp and Mangalore Refinery and Petrochemicals Ltd (MRPL) - that have committed to refine only 60,000 bpd a day.
While Cairn India has a 70 percent share of the oil, state-run Oil and Natural Gas Corp will get 30 percent. The Rajasthan fields will together account for 20 percent of India’s production.
Cairn India chief executive and managing director Rahul Dhir said the company would not clamp down on production in fear of refiners not taking the crude.
“The government has always taken its decision well before time, which I am sure they will do in this matter too,” Dhir said, soon after the inauguration ceremony.
The Mangala field will start from a few thousands barrels now to 30,000 bpd this year, with peak output of 125,000 bpd expected by the middle of next year.
Cairn India is also laying a 700-km heated insulated pipeline to the Gujarat coast. Till it is complete, the crude will be transported by trucks. The first consignment will go to Indian Oil.
“We are building the pipeline without enough contracts for the crude,” Cairn chairman Bill Gammell said.
“When we started the business in India, there was no pipeline, there was no purchaser for crude. But the government has been steadfast with us,” he added.
Gammell said the pipeline was expected to be ready by year-end.
- PM to launch Cairn's Mangala production Saturday - Aug 26, 2009
- Cairn starts oil production in Rajasthan - Aug 29, 2009
- ONGC approves Cairn-Vedanta deal - Sep 28, 2011
- Cairn sees cost for Rajasthan crude prod at $5/bbl - Aug 20, 2009
- Vedanta meets all conditions for stake buy out: Cairn - Dec 07, 2011
- Cairn to begin oil production from Rajasthan this month - Aug 02, 2009
- First parcel of Mangala crude reaches Mangalore Refinery - Oct 09, 2009
- Vedanta buys out Cairn's India subsidiary - Dec 08, 2011
- Cairn India starts crude sales through pipeline - Jun 15, 2010
- India's crude oil production continues to rise - Jun 29, 2010
- Vedanta to pick up majority stake in Cairn India (Lead) - Aug 16, 2010
- Mangala oil processing terminal activation a historic achievement: Deora - Aug 29, 2009
- PM launches Cairn India's oil fields in Barmer - Aug 29, 2009
- Manmohan Singh to inaugurate Mangala oil field in Rajasthan today - Aug 29, 2009
- Cairn Energy tells Indian arm to accept government terms - Aug 23, 2011
Tags: barmer, cairn india, chairman bill, contingency measures, gammell, inauguration ceremony, indian oil, mangala, manmohan, manmohan singh, mrpl, new oil, oil field, peak levels, peak output, petrochemicals, prime minister manmohan, prime minister manmohan singh, refiners, sibal