New Delhi: Cairn India Ltd, a unit of UK explorer Cairn Energy Plc, said it reached an initial agreement to sell crude to Reliance Industries Ltd (RIL), its first privately owned customer.

Cairn, which was mandated by the government to sell oil to state refiners, will deliver crude oil to RIL’s refinery at Jamnagar in Gujarat from the Mangala field in Rajasthan through heated tankers, the explorer said in an emailed statement on Tuesday. The Union government has approved sales to private refiners, Cairn said.

Power business: Workers at Cairn India’s Mangala field. The firm will deliver crude oil to RIL’s refinery at Jamnagar in Gujarat

The terms for the initial crude sales to RIL have been concluded, Cairn said. The implied price realization represents an average 10-15% discount to Brent crude on the basis of prices prevailing for the six months ended 30 September, according to the statement, which didn’t provide more details.

Cairn India shares climbed 2.9%, the most since 16 October, to Rs264.55 in Mumbai trading compared with a 3.3% increase in the benchmark Sensex index. RIL shares gained 5.6%, the most since 18 May.

RIL, India’s most valuable company, operates a 1.24 million barrel-a-day refining complex at Jamnagar, Gujarat.

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