Cairn India to supply crude oil to Reliance Ind

MUMBAI (Reuters) - Cairn India, a unit of UK firm Cairn Energy, said on Wednesday it had reached a deal to supply crude oil from its field in western India to leading conglomerate Reliance Industries.

Cairn will deliver the oil, from its Mangala field in the state of Rajasthan, to Reliance's refinery in Jamnagar in the western state of Gujarat.

Financial details were not disclosed.

A source close to the negotiations said Cairn would be supplying about 1.92 million barrels to Reliance until March 31.

"First parcel from Rajasthan terminal to Reliance's refinery is expected to be sent by trucks on Nov 24," the source, who did not wish to be named told Reuters

The Indian government has allocated about 5 million barrels or 700,000 tonnes to three state-run refiners- Hindustan Petroleum Corp, Mangalore Refinery and Petrochemicals LTd and Indian Oil Corp.

Oil Minister Murli Deora on Wednesday said Cairn India is expected to pump 2.4 million tonnes or about 17 million barrels in the current financial year ending March 31.

"Cairn has requested the Government of India to nominate additional offtake arrangements and discussions with other private refiners are in progress," the company said in the statement.

It also said crude supplied to Reliance will be sold at an average 10-15 percent discount to Brent on the basis of prices prevailing for the six months to September 2009.