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Cairn India, which has commenced crude production from the Mangala field in Barmer, Rajasthan, has concluded an initial agreement to supply crude oil from the Mangala field to Reliance Industries Limited (RIL) in Jamnagar, Gujarat.
This agreement is pursuant to the Government of India’s (GoI) approval allowing private refiners to qualify as additional offtakers of the Rajasthan crude.
The crude oil will be delivered to RIL’s Jamnagar refinery through heated crude oil tankers.
As in the case of GoI nominees, IOC and MRPL, the commercial terms including the price for the initial offtake of the Rajasthan crude have been concluded with RIL.
The implied price realisation represents an average 10-15% discount to Brent on the basis of prices prevailing for the six months to September 2009.
Cairn has requested the GoI to nominate additional offtake arrangements and discussions with other private refiners are in progress.
Cairn has designed the Mangala Processing Terminal (MPT) to process crude before being evacuated for sale to GoI nominees and private refiners. The MPT will process crude from the Mangala, Bhagyam and Aishwariya fields - collectively known as the MBA fields. The MPT is designed to process 205,000 bopd of crude with scope for further expansion.
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