MRPL reaches understanding on buying crude oil from Cairn

Mangalore Refinery and Petrochemicals (MRPL), the refining unit of Oil and Natural Gas Corp (ONGC), today said it has reached an understanding on a deal to buy crude oil from Rajasthan fields of Cairn India.     

"We have reached an understanding and currently the agreement is being documented. It may take 2-3 weeks for us to sign a pact," MRPL Chairman R S Sharma told reporters here.     

MRPL will buy 2 lakh tonnes of crude oil from the Barmer district oilfields of Cairn in the remaining part of the current fiscal. The volume will double next fiscal.     

Company Director (Finance) L K Gupta said MRPL is still discussing various issues including discounts.     

Cairn has offered to sell the Rajasthan crude to MRPL at the price which it has finalised with Indian Oil Corp (IOC). In addition, it has also offered to make a transportation arrangement for delivering Rajasthan crude at New Mangalore port, for which MRPL will pay the notional ocean freight.     

But MRPL wants an additional discount of $1.1 a barrel to make up for the ocean freight it has to pay for transporting crude from the Gujarat coast to Mangalore. Cairn has, however, not agreed to give any discounts other than those agreed with IOC.     

IOC, the principal buyer of Rajasthan crude oil, has reached an agreement with Cairn to buy 19 lakh tonnes at a discount of about 11 per cent to the current Nigerian Bonny Light crude oil price, an official said.