Cairn gets nod to sell output to private sector refiners
30 Oct 2009
Private refiners in India will now for the first time be able to refine domestic crude output with Cairn Energy's proposal getting the green light from the government. Cairn had sought the government's approval for selling the output from its Rajasthan fields to private sector refiners.
Cairn had started production from its Rajasthan fields in August but could only sell a limited quantity to ONGC subsidiary Mangalore Refinery and Petrochemicals Ltd which cited berthing problems to accept a larger portion of Cairn's output.
Other public sectors refiners were also not in a position to take up refining Cairn's crude with HPCL and BPCL saying they would not be able to take the crude till their new plants went on stream in a couple of years, while Indian Oil cited logistical problems to buy time till January.
The three refiners have committed to take an amount of 0.7 million tonnes during the rest of the current fiscal and 2.4 million tonnes in the next fiscal. The company is expected to produce a minimum of one million tonne, while at the peak output projected in 2012 it will produce 8.75 million tonnes.
Cairn is also seeking permission to allow exports to southeast Asian refineries to establish an appropriate price for Rajasthan crude, a proposal still awaiting government approval.
The three refiners have committed to taking 0.7 million tonnes of output during the remaining part of current fiscal and 2.4 million tonnes in next fiscal. Cairn will this year produce a minimum of one million tonne. Peak output of 8.75 million tonnes is projected in 2012.