Cloud over pipeline to MRPL to get cleared by mid-07: Dhir

New Delhi, Dec 9 (UNI) Commenting on the current debate over delayed production of crude oil from the Rajasthan fields, Cairn India Ltd today said the issue would be sorted out by the middle of next year.

''We are putting in all possible efforts to resolve the issue by middle of next year,'' Cairn India Ltd Chief Executive Officer (CEO) Rahul Dhir told reporters here.

Earlier, Cairn India's offer document to SEBI had said the production of crude oil from its Rajasthan fields could be delayed because MRPL had not honoured a committment to build a pipeline.

Mr Dhir said the production from the Barmer block would be started by mid of 2009, adding that the price of crude oil will be finalised with respect to the global oil prices.

Cairn had also written in its offer document that responsibility for the construction of the pipeline lies with the Government and MRPL, its nominee.

Speaking while announcing its public offering here, Mr Dhir said that the company's total production of oil would be increased five times to 1.25 lakh barrels per day.

Presently, the company's production is 24,000 barrels per day.

''The company will spend Rs 6,000 crore on the development work of the Rajasthan oil fields,'' Mr Dhir said, adding, by 2009 the company would produce 1.50 lakh barrels per day from the fields.

In Rajasthan oil fields, Cairn has 70 per cent stake, while ONGC owns the remaining stake.

With a view to increase production rate, Cairn India Ltd has entered into the capital market with public offer of 32,87,99,675 equity shares of Rs 10 for cash at the price band of Rs 160 to Rs 190 available through 100 per cent book-building process.

The issue opens on December 11 and closes on December 15. The premium of the offerings is yet to be decided.

The IPO will help Cairn India Ltd raise a minimum of Rs 8.61 crore at the lower end of the price band and a maximum of Rs 9,900 crore at the upper end of the band, Mr Dhir said.

Out of the total offer, the company has reserved 60 per cent for allotment to qualified institutional bidders (QIBs), of which 5 per cent will be reserved for allotment to mutual funds. Further, 10 per cent is being reserved for allotment to non-institional investors and the balance 30 per cent will be made available for allotment to retail investors on a proportionate basis.

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