Indian Oil Corp (IOC) may buy Cairn Energy's Rajasthan crude oil but has sought heavy discounts to make the lower grade crude oil economically viable."We are willing to buy crude oil from Cairn provided it is at the right price. We have several months back discussed the issue and still maintain the stand that unless they give us good discount we cannot buy it," a senior IOC official said.The discounts being sought are in the range of $8-10 per barrel to the market traded price."A few months back when we discussed the issue, we wanted to lay a pipeline from Barmer district in Rajasthan to Papinat refinery in neighbouring Haryana. But talks broke as they were unwilling to give us discounts," the official said.Cairn's Rajasthan crude, which comes on-stream in 2009, has high wax content and will need specialised pipelines with internment heating for transportation. It turns semi-solid under normal conditions, has no LPG potential and the Naphtha yield is also very low (less than 2%). "Unless the cost of transportation and low yield is compensated by way of discounts, it is unviable for any refinery to process Rajasthan crude," he said.When contacted Cairn spokesperson David Nisbet said: "we are in continued negotiations with the government and third parties (for offtake of crude)." Currently, Oil and Natural Gas Corp's subsidiary MRPL is the official offtaker of the Rajasthan crude. But ONGC is neither keen on taking the crude to MRPL for processing nor is it going ahead with previously announced plans to build a refinery at Barmer to process the Rajasthan crude.
