Reliance defers crude oil delivery to CPCL by 2 months

Reliance Industries expects delivery of crude oil from its eastern offshore Krishna Godavari basin D6 block to Chennai Petroleum Corp (CPCL) to be delayed by about two months following an equipment failure at the oilfield.

Reliance, which last month sold its first shipload of oil from MA-1 oilfield in the gas-rich D6 block to Vizag refinery of HPCL, was to deliver the second consignment to CPCL on December 23/24.

''They have told us that the shipment will reach us around February 15,'' CPCL managing director K K Acharya said.

Reliance, which started production at its MA-1 field in September, had to shut it down on 9 December for three to four weeks following pipe rupture at the floating, production, storage and off-loading vessel (FPSO).

CPCL has contracted 450,000 barrels of oil from Reliance at a discount of $5.34 a barrel to the internationally traded price of Nigerian Bonny Light crude oil – at  the same price paid by HPCL for its first consignment.

CPCL was interested in entering into long-term contract for MA-1 crude but the pricing can be settled only after the refinery is able to process the first consignment, Acharya said.

Reliance had offered to sell 300,000 to 320,000 barrels of oil to CPCL after the shut-down, but wanted the company to wait until February if it wanted the full contracted quantity.