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| Cairn to start crude output from Rajasthan field in Aug |
| Press Trust of India / New Delhi Jul 29, 2009, 21:06 IST |
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Oil explorer Cairn India today said it is ready to start crude oil production from its prolific Rajasthan block next month and has reached pricing agreements with principal buyers Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals (MRPL).
"We are operationally ready to commence oil production in August," company's CEO Rahul Dhir said.
Beginning of oil production from the Barmer district oilfields would be the most significant event in the energy space in the past two decades. This is the biggest oil discovery made in India in more than two decades after the Gandhar find in Gujarat by Oil and Natural Gas Corp (ONGC).
Rajasthan is the largest onland oilfield discovered in more than two decades and will have a peak output of 8.75 million tonnes, contributing one-fifth of the nation's current oil production.
Cairn India's Rajasthan oil fields will bring down India's oil import bill by $6.8 billion or 7 per cent, Goldman Sachs said adding peak output from the fields was likely to be 190,000 barrels per day (bpd) (9.5 million tonnes a year) as against 175,000 bpd forecast by the company.
Dhir said pricing negotiations for the initial offtake of Rajasthan crude have been concluded with the government of India nominees -- IOC and MRPL. "We have concluded pricing negotiations with MRPL and IOC for the initial quantities of crude from Rajasthan which currently represents a 10 to 15 per cent discount to Brent."
The government has approved the revised Mangala field development plan including pipeline and higher processing capacity of 2,05,000 bpd.
Cairn has drilled 28 wells on the Mangala oilfield in the Rajasthan blocks. Of which, 16 have been completed and ready for production.
The first processing train of 30,000 barrels per day capacity was ready and the second unit would be ready by the fourth quarter of 2009.
"Cairn is working with the government authorities to start production from the Mangala field in Rajasthan in August," a company statement said.
The pipeline transporting the crude from deserts of Rajasthan to Gujarat coast would also be completed by end of 2009.
Train three (50,000 bpd) which will follow Train two is progressing on target to attain Mangala plateau production of 125,000 bpd by H1 2010.
Cairn reported a net profit of Rs 45.44 crore in the quarter ended June 30 as against Rs 138.58 crore in the same period last fiscal.
Total income has decreased from Rs 461.43 crore for April-June quarter last year to Rs 333.92 crore for the quarter ended June 30, 2009.
The average oil price realisation in Q1 was $60.2 per cent as against $125.9 a barrel a year ago. The gas price realisation in Q1 2009-10 was $4.0 per thousand cubic feet as opposed to $4.3 a thousand cubic feet last year.
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