HPCL, ONGC to buy initial oil from Cairn's Rajasthan block

Written by Agencies | New Delhi | Updated: Mar 31 2009, 20:40pm hrs
Hindustan Petroleum Corp Ltd's Vizag refinery and Mangalore Refinery of Oil and Natural Gas Corp (ONGC) have been named buyers of the initial crude oil Cairn India will produce from its prolific Rajasthan block.

The first 15,000 barrels per day of Cairn output has been split equally between the two coastal refineries, a top Government official said.

Indian Oil Corp (IOC) would also take the Rajasthan crude once volumes reach 50,000 bpd by the end of 2009.

"A formal letter indicating the volumes allocated between the three has been sent to Cairn. They (Cairn) has to now enter into appropriate crude sale agreements," the official said.

When contacted, Cairn India CEO Rahul Dhir refused comments on the issue saying: "We are in discussions with the Government to finalise the offtake arrangement... we have not fully concluded the offtake arrangements so far."

Dhir said the focus for the company currently was to start oil production from Mangala, the biggest oilfield in the Rajasthan block, by the third quarter of 2009 calendar year.

"We are targeting 30,000 bpd (1.5 million tonnes a year) of crude oil production from Mangala by (the) July-September quarter. Output will rise to 50,000 bpd (2.5 million tonnes) by Q4," he said.

Cairn, he said, was trying to pump small quantities of oil in the next month or so.