Cairn explores options for Mangala oil

Cairn Energy is evaluating multiple options for evacuating crude oil from its Mangala field in Rajasthan even as negotiations on the price at which the "waxy" crude will be sold are on with its partner ONGC.

One option is to lay a pipeline to the Adani group's Mundra port in north Gujarat to transport crude to ONGC's Mangalore Refineries and Petrochemicals Ltd or to HPCL's Mumbai refinery.

Another option is to transport the crude to either Essar's Vadinar refinery near Jamnagar or to RIL's refinery near Jamnagar through a pipeline. HPCL's proposed Bhatinda refinery could be another destination.

Cairn Energy Director David Nisbet said the company was exploring all three options to evacuate crude from the Barmer basin.

"We hope to commence commercial production by the fourth quarter of 2008 from Mangala and other two fields "" Aishwarya and Bhagyam," he added.

ONGC, which holds 30 per cent in Cairn's Rajasthan block, had announced plans to have a well-head 7.5 million tonnes (mt) refinery in Rajasthan. But the proposal is still on paper.

Though Cairn has an option of transporting crude to the neighbouring 33-MT Reliance Industries refinery or the 12.5-MT Essar refinery, which will be commissioned by April 2007, ONGC is unlikely to allow Cairn to take up these options.

Cairn may opt for piping crude to the Mundra oil terminal and shipping it to MRPL until the Rajasthan refinery is commissioned.