Cairn India, the company that gave the nation its largest oil discovery in more than two decades, has sold the first crude from its prolific Rajasthan fields to the Mangalore Refinery and Petrochemicals Ltd (MRPL).

Cairn sold a 29,000-tons parcel to MRPL earlier this month, a top official said.

“Yes, I can confirm that we will be receiving the first oil from Rajasthan at our refinery this evening,” MRPL Managing Director Uttam Kumar Basu said.

The 208,000 barrels or 29,000-tons parcel was loaded on a Singapore-flagged vessel at the Kandla port in Gujarat and sailed for Mangalore on October 5.

Cairn had on August 29 started production from its Barmer district fields in the Thar desert near the Pakistan border.

Oil from the giant Mangala field in the block is transported by trucks and tankers to Kandla on the Gujarat coast for onward shipment to MRPL, which is nominated by the government as one of the buyers of Cairn’s crude.

A MRPL official said the price would be the average price of Nigerian Bonny Light crude oil for October minus a discount for the quality of the Rajasthan crude. The discount too would be calculated based on the product prices in the month.

MRPL and Indian Oil Corp (IOC) have been allocated 0.20 million tons each of Rajasthan crude in the period up to March 31, 2010, while Hindustan Petroleum Corp Ltd (HPCL) would offtake 0.30 million tons.

Basu said MRPL, a unit of state-run Oil and Natural Gas Corp (ONGC), will begin processing the Rajasthan crude at the 9.69 million-tons-a-year refinery this week itself.

Mangala, one of the world’s largest new onshore finds, is the biggest in India after ONGC’s Gandhar in Gujarat that was discovered more than two decades ago.

Peak output of 175,000 barrels per day (8.75 million tons a year) by 2011 from Mangala, Bhagyam and Aishwariya - three of the 25 discoveries Cairn has made in the Rajasthan block - will account for one-fourth of India’s current oil production.

Initially, Mangala has been put into production and other fields will follow. The output from Mangala would be ramped up to 30,000 bpd this month and will hit the peak of 125,000 bpd in the first half of 2010.

Bhagyam, Aishwariya and also other small fields will start production in 2010 and peak output of 1,75,000 bpd is forecast in 2010.

Cairn India holds a 70 per cent stake in the RJ-ON-90/1 block, while ONGC holds the balance.

The official said supplies to IOC will begin after commissioning of a pipeline from Barmer to Gujarat coast in December.

In 2010-11, IOC would buy 1.5 million tons of the crude, while MRPL would double its offtake to 0.40 million tons. HPCL would take 0.50 million tons next fiscal. Against the total committed offtake of 2.4 million tons, the output would be over 6.2 million tons, he added

Keywords: CairnMRPLIOC

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