India`s cabinet has rejected an oil ministry proposal to award a deepwater block off the west coast to Cairn India Ltd a unit of U.K. explorer Cairn Energy Plc a government source said on Thursday.

The oil ministry official, who could not be named, told Reuters the company had not offered the government an attractive enough share of potential production.

Earlier, Oil Secretary R.S. Pandey said the federal cabinet had approved the award of 44 out of 45 blocks as recommended by the oil ministry. "One Mumbai basin block has not been approved by the cabinet
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Govt canceles Cairn India bid for Mumbai basin.... more news??...

Cairn India Ltd (CIL) has approached the Petroleum Ministry to take an early call on the refineries it will nominate to lift Rajasthan crude. The company wants a clear picture, so that a decision on the valuation of crude can be taken before the production commences, official sources said.

Cairn, which follows the January-December financial year, is targeting second quarter of 2009 to start commercial production from its Barmer fields in Rajasthan. “Since the price of the crude is to be decided between the Government nominee/nominees and the contractor, it is important to have a clear indication,” sources told Business Line.

production sharing contract


The production sharing contract (PSC) signed with the Union Government stipulates that the parities – the buyers and sellers – should meet six months prior to the commencement of commercial production, to establish an appropriate basket of crude oil to calculate the price.

Cairn India plans to produce 8.25 million tonnes a year of crude at its Barmer oil field. ONGC is a 30 per cent partner in the field.

Official sources said that “discussions on nominee refineries are going on.”

The situation arose since Mangalore Refinery and Petrochemicals Ltd (MRPL), which is the official nominee, has indicated that it can lift only up to 1.2 million tonnes. This has lead to the Government considering having more than one nominee.

While Indian Oil Corporation Ltd has said it can take up to two million tonnes of crude, Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation can take up to one million tonnes each.

However, now MRPL has indicated that it can take more of Cairn’s crude if it is given higher quantity of ONGC’s Mumbai High crude for blending with Rajasthan crude.

Benchmarking


Both Cairn and ONGC, as sellers, have agreed on a sellers’ benchmark offer price consisting of a basket of crude oils, whose blend is similar to the Rajasthan crude and which is actively traded in the international oil market and reported in Platts. The refiners are comparing Cairn’s crude with Maya (Mexican crude variety) or Ratawi (neutral zone), currently sold at a substantial discount.

The PSC requires price to be fixed by references to a basket of f.o.b. (free on board) crude adjusted for differences in quality, delivery time, quantity and payment terms.

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First oil from Mangala on schedule for H2 2009

Rajasthan growing resource base of over 800 mmboe net with growth potential

MBA potential plateau gross production ≥175,000 bopd

EOR for MBA : Potential for plateau extension and enhancement

Pipeline construction commenced

Shifting of delivery point from Barmer to Gujarat coastapproved

Rajasthan development estimated cost for CY 2008 & 2009: $1.8 billion net

Further exploration and growth opportunitiesWell placed for future growth...

Harikrishnan. Buy cairn india below 130 level. 2010 traget 750+ .......

Harikrishnan...Reliance Refinery, Gas Projects May Be Delayed.
Industries Ltd. may be forced to miss its deadlines for starting production at its new oil refinery in western India and a gas field off the country`s eastern coast, the Economic Times reported, citing unnamed company officials familiar with the plans.

India`s biggest company by market value may begin production at the refinery and the gas field in January 2009, missing a December deadline, as global fuel demand declines, the newspaper said. Reliance spokesman Paresh Chaudhry didn`t answer calls to his mobile phone before office hours.

The newspaper said an unnamed Reliance spokesman denied that the Mumbai-based company`s gas and refinery projects face delays. Reliance had said on Oct. 8 that its 580,000 barrels-a-day refinery in Gujarat state is expected to start operating by the end of November.

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Harikrishnan.Buy cairn india below 130 level....

whats the impact on the stock price and does this benefit the company?...

Sir will the stock price go up.. i have 1000 brought at 237.. when it will reach the 237 level ??...