Cairn India’s crude oil will finally go for refining, with Mangalore Refinery and Petrochemicals Ltd (MRPL) receiving the first consignment tomorrow. The 2,08,000-barrel consignment of crude oil has been shipped from the Gujarat coast to Mangalore.
MRPL, a subsidiary of Oil and Natural Gas Corporation, is one of the government nominees that will receive the crude oil which is being produced from Cairn’s Barmer block in Rajasthan. The field had gone into commercial production in August.
Pending construction of a pipeline link, crude oil from the field is being transported through specially designed trucks to the Kandla port in Gujarat. Cairn owns a storage facility at Kandla from where crude was loaded on to Cougar, which carried the consignment on sea to Mangalore. Similar cargoes are expected to be transported to the refinery in the future.
The crude oil is being sold at a discount of about 10-15 per cent to the six-monthly average of Brent crude oil. Rajasthan crude is heavy and waxy and requires to be transported in an insulated pipeline, being built by Larsen & Toubro.
The Mangala field in the block which has gone into production is the biggest crude oil discovery after Bombay High in the 1970s. It is also the first onland discovery of such size in the past 22 years. The Barmer fields could boost the country’s oil output by about 20 per cent from the current 6,80,000 barrels a day, with the Rajasthan basin estimated to have 1 billion barrels of oil reserves. Initially, Mangala’s production will be raised up to about 30,000 barrels a day (bpd) from two wells and then gradually increased to 125,000 bpd.