Clearing the last hurdle for beginning oil production from Cairn India's Rajasthan fields, the government today approved shifting the delivery point from where state refiners IOC, HPCL and MRPL will take oil when output starts this month.
An Empowered Committee of Secretaries (ECS) agreed to shift the delivery point in the period leading up to commissioning of a heated pipeline transporting crude from Barmer in Rajasthan to Bhogat in Gujarat, official sources said.
The panel of top bureaucrats, however, did not agree to nominate private companies to buy Rajasthan crude oil after state refiners exhaust their consumption capacity, sources said.
With this approval, Cairn can now begin crude oil production and truck the oil to the points from where the state refiners will pick it up for processing at their plants.
The delivery point was earlier shifted from field flange to Bhogat in Gujarat and the cost of the pipeline laid for transporting the oil to that point was included in the field cost as the refiners were unwilling to incur the expenditure for shipping crude.
Sources said Cairn had requested that Radhanpur and Viramgam be approved as additional delivery points when the refiner begins to buy Rajasthan crude in Q1 2010 and Kandla as interim delivery point for Mangalore Refiner and Petrochemicals and Hindustan Petroleum Corp.
Sources said the ECS today approved Kandla as the interim delivery point for MRPL and HPCL while IOC will pick up the crude at Bhogat, Radhanpur and Viramgam.
The ECS, they said, was of the view that PSUs should get the first right to buy Rajasthan crude and private companies like Reliance Industries and Essar Oil will be considered only after the state refiners throughly process the oil and decide on their requirements.
The government has nominated IOC, HPCL and MRPL to buy Cairn crude.
