Buyers queue up for Cairn’s crude from Rajasthan
With international crude oil prices hovering around the $140 per barrel mark, Cairn India’s waxy Rajasthan crude is suddenly in high demand.
By ET Bureau |
BANASKANTHA,RAJASTHAN: With international crude oil prices hovering around the $140 per barrel mark, Cairn India���s waxy Rajasthan crude is suddenly in high demand. Reliance Industries (RIL) and Ruias-promoted Essar Oil have agreed to buy entire crude oil from Cairn India���s (CIL) Rajasthan blocks and are negotiating prices.
Confirming the move, a source told ET: ���We have received an expression of interest from RIL, Essar, Indian Oil and Mangalore Refineries to buy our Mangla crude.��� It is learnt that RIL has agreed to buy 60,000 barrels of oil per day (bopd) for processing at its new refinery being commissioned by it���s subsidiary Reliance Petroleum (RPL). Similarly, Essar Oil has agreed to buy up to 1,20,000 bopd of crude oil from Cairn to process at it���s 10.5 million tonne per annum refinery in Vadinar.
Indian Oil Corporation (IOC) and Mangalore Refinery and Petrochemicals (MRPL) has expressed desire to buy another 20,000 bopd each. ���The price of crude oil is being negotiated. We are seeking discount of over 10% over Brent as Cairn���s oil is waxy in nature,��� said a senior executive of a Gujarat based refiner.
An analyst working with international brokerage firm based in Mumbai said: ���RIL and Essar refineries are complex and are capable of processing Mangla crude. They can also make by-products because of the waxy nature of the crude. The biggest benefit is that both the firms will save time and freight cost because Cairn���s delivery point has shifted to Gujarat, which is five and 10 km away from Cairn���s proposed pipeline. ���We are in talks with various public and private refiners for sale of our Rajasthan crude,��� Cairn India chairman Sir Bill Gammell said, refusing to disclose the price sought by Cairn.
At peak production, Cairn���s Mangala, Bhagyam and Aishwarya fields will aim to produce 1,75,000 bopd and will boost India���s domestic oil production by over 25%.
An Essar spokesperson said, ���At present we are not buying any crude from Cairn.��� Cairn India shares lost 3.01% to close at Rs 260.75 over the previous day���s close. The shares have lost 6.09% in the last one week and 14.91% in the last one month.
Confirming the move, a source told ET: ���We have received an expression of interest from RIL, Essar, Indian Oil and Mangalore Refineries to buy our Mangla crude.��� It is learnt that RIL has agreed to buy 60,000 barrels of oil per day (bopd) for processing at its new refinery being commissioned by it���s subsidiary Reliance Petroleum (RPL). Similarly, Essar Oil has agreed to buy up to 1,20,000 bopd of crude oil from Cairn to process at it���s 10.5 million tonne per annum refinery in Vadinar.
Indian Oil Corporation (IOC) and Mangalore Refinery and Petrochemicals (MRPL) has expressed desire to buy another 20,000 bopd each. ���The price of crude oil is being negotiated. We are seeking discount of over 10% over Brent as Cairn���s oil is waxy in nature,��� said a senior executive of a Gujarat based refiner.
An analyst working with international brokerage firm based in Mumbai said: ���RIL and Essar refineries are complex and are capable of processing Mangla crude. They can also make by-products because of the waxy nature of the crude. The biggest benefit is that both the firms will save time and freight cost because Cairn���s delivery point has shifted to Gujarat, which is five and 10 km away from Cairn���s proposed pipeline. ���We are in talks with various public and private refiners for sale of our Rajasthan crude,��� Cairn India chairman Sir Bill Gammell said, refusing to disclose the price sought by Cairn.
At peak production, Cairn���s Mangala, Bhagyam and Aishwarya fields will aim to produce 1,75,000 bopd and will boost India���s domestic oil production by over 25%.
An Essar spokesperson said, ���At present we are not buying any crude from Cairn.��� Cairn India shares lost 3.01% to close at Rs 260.75 over the previous day���s close. The shares have lost 6.09% in the last one week and 14.91% in the last one month.
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