Cairn to start oil production in Rajasthan next month

20 March 2009

Cairn India is all set to start crude oil production from its prolific oil field in Barmer, Rajasthan, the company said in a letter to the petroleum ministry.

Initial oil production is expected to be around 4,000-5,000 barrels per day and the company plans to dispatch this in tankers to the nearest refinery proposed by the government.

Cairn, however, said the government was yet to find a buyer for the crude oil.

Under the production sharing contract with the government, the government has to appoint the buyers for the crude before actual production starts.

While the government-nominated Mangalore Refinery and Petrochemicals Ltd was unwilling to take anything more than 1.02 million tonnes out of the peak output of 8.75 million tonnes, Reliance Industries has placed a demand for 30,000 to 60,000 bpd (1.5-3 million tonnes) of Cairn crude.

Essar Oil has written for 30,000 bpd this year and 120,000 bpd (6 million tonnes) by 2011 when it expands its Vadinar refinery in Jamnagar district.