“He (Agarwal) met the minister and sought approval to allow export of crude as it can substantially increase contribution to the exchequer while improving efficiency of refineries. Cairn has been asked to submit details,” a senior petroleum ministry official said.
Another meeting is scheduled this week between the petroleum minister and the Cairn-ONGC JV to go into details, he said.
“We have proposed a swap agreement wherein we will export this waxy crude and import a better quality and establish a better market price for the Rajasthan crude…any incremental revenue arising out of the higher price would be split between the government and the Rajasthan JV partners (Cairn and ONGC)…it would mean that on every one dollar incremental revenue, the government and its nominee gets 70-80 cents,”said a senior official of the Rajasthan JV of Cairn and ONGC.
Under current law, companies are not allowed to export crude oil. Oil producing companies are obliged to sell their entire produce only to the government or a nominee it appoints.
Keen to export crude to Japan and Singapore, Cairn is currently producing huge volumes of heavy crude in Rajasthan.
If Cairn’s proposal is accepted, it would be a significant step as India meets 80% of its crude oil requirements through imports. Cairn would become the first company to export crude oil from India.