MPRL searching for new crude oil sources

Mangalore Refinery and Petrochemicals Limited (MRPL) has begun looking for oil sources in Australia, West Africa and South America.

The move has been taken in order to prevent problems due to any possible reduction in supply of crude oil imports from Iran from November 4, following US sanctions.

MRPL sources more than 65% of its nearly 1.6 crore tonne a year crude oil requirement from the Middle East. Iran supplies about 45 lakh tonne crude oil a year, which meets 25% of MRPL’s total requirement, sources in MRPL told DH.

“Though the Indian government is engaged in talks with the US government, the Ministry of Petroleum and Natural Gas, as a precautionary measure to mitigate the risk of non supply of crude oil, has begun knocking on the doors of Australia, South America looking for alternative sources,’’ the sources said.

The diversification in alternate crude oil resources also reduces the risk of reliance on a single geographic area, observed the sources in the company.

MRPL Managing Director M Venkatesh said Iran has already supplied 90% of its total crude oil to MRPL. “The crude oil parcel for the month of October is already on its way. A clear picture on supply of crude oil is likely to emerge only after November 4,” he said.

“The ongoing clean fuel regulatory changes and the likely reduction in supplies of crude from Iran, following sanctions, will surely dent MRPL’s profitability in this fiscal,’’ the sources stressed.

MRPL, with a capacity to process 15 million metric tonnes per annum crude had achieved a crude throughput of 16.31 mmt in previous fiscal. MRPL’s gross turnover in 2018 had stood at Rs 63,067 crore and net profit at Rs 2,224 crore in previous fiscal.