Twenty five years ago, when the Aditya Birla Group wanted to promote the Mangalore Refinery and Petrochemicals Limited (MRPL), it was depicted as a monster that would gobble up fertile land, make it barren, bring acid rain, pollute water bodies and the sea and will divest the local youths of their livelihood. This campaign had led the undivided Dakshina Kannada district into many riots and turmoil that killed one person Rajaram Servegar, a political worker.
Today, under the banner of oil and natural gas major Oil and Natural Gas Corporation (ONGC), the coastal city of Mangaluru has transformed itself into a model petroleum and petrochemical hub that is making waves internationally.
While none of the developments that were feared way back in 1993 has happened, on the contrary, the shrubby land around the petrochemical complex has seen growth of lush green forest and the Arabian sea is still yielding the same volume of fish year after year. The ambient air quality around the refinery has not deteriorated as depicted and what is more, the complex has generated ample employment to both skilled and unskilled workforce.
This grassroot refinery has a capacity to process 15 million metric tonnes per annum crude, and is the only refinery in India to have two hydrocrackers producing premium diesel. It also has a Polypropylene unit with a capacity of 4,40,000 MT per annum. The refinery is gearing up to produce BS-VI standard diesel by March 2019 and petrol in December 2019.
The country looks up to Mangaluru and Karnataka for one of the most modern petrochemicals complex that has given birth to a number of downstream petrochemical industries and established worldwide presence with sustained business models.
ONGC Videsh Limited (ONGC Videsh), a subsidiary of ONGC, has started buying up the Das blend crude oil originating in the Lower Zakum oilfield in Abu Dhabi, which currently produces approximately 4,00,000 barrels per day. OVL-led Indian Consortium acquired 10% PI(participatory inventory) in Lower Zakum (LZ) Concession through its Dutch Joint Venture Company- Falcon Oil and Gas BV. The Indian Consortium led by ONGC Videsh include BPRL and IOCL. Other shareholders in the LZ concession are Abu Dhabi National Oil Company (ADNOC) (60%), CNPC and JODCO (10% each) and TOTAL and ENI (5% each). It was the first time that Indian oil and gas companies have been given a stake in the development of Abu Dhabi’s hydrocarbon resources and the agreements were signed in Abu Dhabi on February 10, 2018. Prime Minister Narendra Modi, who was present at the signing in ceremony had appreciated Karnataka’s role in achieving the Oil security of the country.
The concession agreement will be in force for next 40 years. Since Mangaluru was the nearest point to Abu Dhabi, the ADNOC had chosen the facilities in and around Mangaluru to enter into an agreement for storing crude in the high caverns built by the Indian Strategic Petroleum Reserve Limited (ISPRL) at two places on the coast of Karnataka namely at Padur in Udupi taluk and Permude in Mangaluru taluk. The parcels have started arriving and the ONGC officials hope to get the caverns to be full to their capacity by this year end. The third such facility is in Vizag on the Eastern Coast.
The OVL has procured 690,000 bbls (barrels) of crude in June last year and sold to MRPL for refining business that operates one of India’s most modern and complex refinery. “This sale to MRPL further demonstrates the commitment of the ONGC Group in enhancing the energy security for the nation. The OVL is now on par with many global companies like Royal Dutch Shell, Exxon Mobil, Sinopec, China National Petroleum Corporation BP Plc, and many others, MD and CEO of OVL Narendra K Varma told DH.
The Das blend crude with approximately 39.20 degree API is best positioned among the ONGC Videsh portfolio of equity crudes to flow to India. This grade of crude is regularly bought by several Indian refiners. Also the shipping distance and voyage time to the west coast is short and can be lifted in a wide range of parcel sizes. This is the first time that India’s oil portfolio looked so good, says former petroleum minister M Veerappa Moily.
“In addition to the existing facilities, the UPA government had proposed to build a pipeline from Mozambique to Mangaluru to carry Liquefied Natural Gas that opens up big industrial plants in all sectors. The expression of understanding has already been drafted with Mitsubishi Heavy Engineering of Japan, OVL and MRPL, but there has been no progress on that count after the UPA-II government,” Moily says.
OVL gets bigger
ONGC Videsh has participation in 41 projects in 20 countries namely Azerbaijan, Bangladesh, Brazil, Colombia, Iraq, Israel, Iran, Kazakhstan, Libya, Mozambique, Myanmar, Namibia, Russia, South Sudan, Sudan, Syria, United Arab Emirates, Venezuela, Vietnam and New Zealand. ONGC Videsh maintains a balanced portfolio of 15 producing, 4 discovered under development, 18 exploratory and 4 pipeline projects. The company currently operates or jointly operates 21 projects. ONGC Videsh had total oil and gas reserves of about 711 MMTOE as on April 1, 2018.
ONGC is the largest oil and gas producer in the country with market capitalisation of Rs 2,09,310 crore as on August 17, 2018. During the financial year ended March 31, 2018, ONGC Group had produced 64.21 MMTOE (million metric tons or oil equivalent) of oil and oil equivalent gas (approx 1.29 Million Metric barrels or oil equivalent per day); the consolidated gross turnover was Rs 3,62,200 crore ($ 54 billion) during FY 18 and total consolidated oil and gas reserves were 1,863 MMTOE as on March 31, 2018. There are all signs of operations getting bigger in volume and value. With so many acquisitions overseas and within the country and ploughing in Rs 10,000 crore into research and prospecting for oil in many parts of the world including our own neighbourhood. However, incidents of various magnitude keep happening that raise concerns of human and environmental safety. The storage areas of byproducts, waste are still areas of concerns which the Pollution Control Board needs to buckle up.
(The writer is a senior journalist based in Mangaluru)
