IFC asks government to clear Cairn''s oil evacuation plans in Rajasthan
Our Banking Bureau
20 June 2007
Mumbai: The International Finance Corp (IFC), a creditor to Cairn India, has asked the Indian government to take "appropriate steps" for approving a pipeline for off take of Cairn''s Rajasthan crude oil when production begins in early 2009.
"This project is very important for India and (it is) in everybody''s interest to get it (production) going as quickly as possible and look forward to seeing that happen. It is important the central government takes appropriate action," IFC CEO and executive vice president Lars Thunell said.
Thunell was speaking after signing an agreement with Cairn for providing additional funds for community development project in Rajasthan.
IFC, the private lending arm of the World Bank, has loaned $150 million to Cairn India for developing the oil fields in Rajasthan and invested another $21 million to pick seven million equity shares in the company on promise to begin delivering the first oil in 2009.
For crude oil production to start in March-April 2009, a pipeline transporting the oil to refiners in Gujarat must have been approved two months ago. Setting up a mini-refinery will take at least 48 months from the date of all approvals.
Cairn says it remains committed to producing first oil in first half of 2009 and quickly ramping up output to plateau of 150,000 barrels per day. But the company is facing growing uncertainty as the government debates between setting up a pipeline to consuming refineries and setting up a mini-refinery at the field itself.