Mangalore refinery 'has plan B' if Iran oil disrupted news
Thursday, 26 January 2012 | 00:00
Mangalore Refinery & Petrochemicals Ltd (MRPL) said on Wednesday that it is ready with a back-up plan in case crude oil imports from Iran are disrupted.
After announcing the company's third-quarter results, chairman Sudhir Vasudeva told newspersons that there are concerns over Irani crude in view of US-led sanctions against that country, and MRPL ''is keeping all options open''.
The Karanataka-based refinery is India's biggest importer of Irani crude.
Concerns about supply disruption escalated this week after the European Union on Monday agreed to ban oil imports from Iran starting 1 July, joining the US in putting pressure on Tehran over its nuclear ambitions. Iran on its part has threatened a military blockade of the Strait of Hormuz, through which most Gulf oil flows.
Further exacerbating MRPL's woes and those of Indian oil importers in general is the modes of payment, as the US and its allies try to block the Turkish route which India and other countries have been using so far.
During talks between officials of the two countries last week to resolve the issue, Iran asked India to pay for its oil partly in the yen because they are concerned that they may not get sufficient value from the rupee, which is not fully convertible, according to reliable reports.
Vasudeva said that for the current year the contract is for sourcing 7.1 million tonnes from Iran. However, actual procurement could be less than this, he admitted.
The company gets a 90-day credit on supplies from Iran. The current outstanding payment to Iran is $1.1 billion. These are not dues, Vasudeva clarified.
Vasudeva said that there is no supply disruption but the company is prepared for any eventuality and is in discussions with suppliers in Latin America, the Middle East and Africa.
MRPL, a subsidiary of the state-owned Oil & Natural Gas Corp, plans to continue Irani oil imports in the next fiscal year too, MRPL managing director U K Basu added.
India has been importing an average of 21 million tonnes of crude a year from Iran over recent years; but the volume is estimated to fall to about 13-14 million tonnes in the current fiscal as refiners actively seek alternative arrangements.
The net profit of MRPL in the third quarter ended December dropped 65 per cent, attributed mainly to rupee depreciation.
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