NEW DELHI: India Mangalore Refinery and Petrochemicals Ltd may buy less oil from Iran in 2011-12, its managing director said on Tuesday citing shutdowns, but crude processing data showed the cutback may reflect payment problems with sanctions-hit Tehran.
"In the third quarter, the company processed 13 percent less crude than a year ago due to shutdown of a cracker unit and hydro-cracker," U.K. Basu said at a conference after the company's results.
But MRPL processed more crude in April to December 2011 than a year ago while its purchases from Iran fell.
Iran's supplies to India have been fraught with payment problems in the past 13 months after a clearing mechanism was scrapped in December 2010 and refiners, including MRPL, have sought alternative supplies.
On Monday, the European Union banned imports of oil from Iran and imposed a number of other economic sanctions, joining the United States in new measures aimed at deflecting Tehran's nuclear development programme and hitting its oil revenue.
These sanctions make India's current payment route through Turkey's Halkbank vulnerable. "(Iran) is an area of concern. There is no difficulty in payment so far. This does not mean things cannot worsen ... You have to be alive to the situation," said MRPL Chairman Sudhir Vasudeva.
US and EU sanctions will be applicable from July but Vasudeva said: "We have to take proactive actions." Basu said MRPL, like other Indian refiners, was in talks with other suppliers such as producers in Latin America, the Middle East and Africa.
MRPL has increased throughput by about 1.5 percent to 9.41 million tonnes in April to December 2011 over the same period in the previous fiscal year. The refiner bought 150,000 bpd of crude oil from Iran in 2010/11 and so far this fiscal year it has bought five million tonnes, equivalent to 100,000 bpd.
Its contract volumes with Iran are for 142,000 bpd in 2011/12, Basu said, adding that the contract for the next fiscal year starting in April has not yet been finalised.
India, the world's fourth-largest oil consumer, buys around 12 percent of its oil from Iran and is paying through Halkbank after a previous clearing mechanism was shut in December 2010. India's refiners import 350,000-400,000 bpd oil from Iran worth about $12 billion a year.
MRPL's refinery has capacity of 236,400 bpd. It aims to raise that by 27 percent to 300,000 bpd by March and to 360,000 bpd by 2015-16.
Comments
Comments are closed for this article.