IFC wants Govt action on Cairn's Rajasthan project
The company expresses concerm over the delays in approving a pipeline to transport Cairn India's Rajasthan crude oil and asks the Govt to take appropriate steps for offtake of oil.business Updated: Jun 20, 2007 13:15 IST
Concerned over the delays in approving a pipeline to transport Cairn India's Rajasthan crude oil, the International Finance Corporation has asked the Indian government to take "appropriate steps" for offtake of oil when production begins in early 2009.
IFC, the World Bank's private sector lending arm, loaned $150 million to Cairn India for developing the oil fields in Rajasthan and invested another $21 million to pick seven million equity shares in the company on promise to begin delivering the first oil in 2009.
But the company is facing growing uncertainty as the government debates between setting up a pipeline to consuming refineries or setting up a mini-refinery at the field itself.
"This project is very important for India and it is in everybody's interest to get it (production) going as quickly as possible and look forward to seeing that happen. It is important the central government takes appropriate action," IFC CEO and Executive Vice President Lars Thunell said.
Thunell was speaking after signing an agreement with Cairn for providing additional funds for community development project in Rajasthan.
For crude oil production to start in March/April 2009, a pipeline transporting the oil to refiners in Gujarat must have been approved two months ago. Setting up a mini-refinery will take at least 48 months from the date of all approvals.
Cairn says it remains committed to producing first oil in first half of 2009 and quickly ramping up output to plateau of 150,000 barrels.