MRPL to eye other sources if Iranian oil unavailable in Apr

Despite Iranian oil yielding better margins Mangalore Refinery and Petrochemicals Limited ( MRPL ) may source oil from the Abu Safah oil fields in Saudi Arabia due to insurance related issues. PP Upadhya, MD, MRPL told CNBC-TV18 that the company is not sure whether they are going to import Iranian oil in the month of April  because of the uncertainty over the insurance.

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Below is the verbatim transcript of PP Upadhya's interview on CNBC-TV18

Q: Will you now be permanently shifting your sources of crude sourcing and will not be doing it from Iran but from Saudi Arabia?

A: No. That is not the reason. This is the tender we have issued and has given the best crude that we have purchased from the market. We have issued the spot tenders. We buy the crude as per our evaluation.

Q: Is the shift to Saudi Arabian crude because of disruptions from Iran?

A: We are getting Iran crude. We are not sure whether in the month of April we are going to get Iran crude or not because of the uncertainty over the insurance. We will just wait and watch.

Q: If uncertainty over insurance continues, will you continue to source non-Iranian crude?

A: Yes. If the uncertainty is over we will continue to buy, otherwise we have to make up for the short-fall from other sources.

Q: What is the capacity you are utilising at the moment?

A: We are operating at 15 million tonne refinery, out of which about 1.8 million tonne comes from Bombay High and remaining crude is imported. We also have various parties from Saudi Arabia, Kuwait from where we are buying the crude and this was the spot tender we issued. We got the crude and rest of the crude we have purchased

Q: Is there any difference in quality or price of the import between the Saudi Arabia's Abu Safah versus Iranian oil? Will it have a financial impact on the company?

A: No. Iranian crude for MRPL is the best suited crude. It gives better margin but when the margin is there we have other problems associated with Iranian crude. Right now we are buying about 4 million tonne, This year we are ending up with 4 million tonne and the crude sourcing is done about one-one and half two months in advance. We have some insurance issues that are not getting resolved.

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