GoI rejects crude oil export proposal by Cairn India

The Dollar Business Bureau The Petroleum Ministry on Tuesday rejected a proposal from Cairn India seeking export of crude oil from Barmer block of Rajasthan. Cairn India, one of the largest oil and gas exploration companies had sought permission for exporting crude oil from India’s largest onshore field, citing that exports would result in additional revenue for the state and central governments in terms of taxes and royalty. However, the Petroleum Ministry, reports said, shot down the proposal stating that the company’s production sharing contract (PSC) with the Centre didn’t provide for sales abroad. The company had also proposed a swap mechanism in its proposal to the Ministry, where it expressed readiness to source crude oil at cheaper prices from the overseas for the Public Sector Units (PSU) refineries, in exchange of the permit to export Barmer crude, said the reports. It is note-worthy mentioning that the company has received offers from various global refineries over buying of crude oil at around $12 per barrel, which is more than what it gets from domestic sales at the moment. The reports further informed that the company, which has been making efforts to increase its revenues from the Rajasthan-based block, is also under continuous efforts seeking review for the existing pricing formula of crude oil from Rajasthan block. The proposal is expected to bring in around Rs 2,800 crore extra revenue per year at 200,000 barrels per day (bpd) and Rs 5,289 crore at 300,000 bpd for the Indian government, the reports said.    

May 26, 2015 | 6:51 pm IST.