After a four-month hiatus, Mangalore Refinery and Petrochemicals Ltd (MRPL) has resumed crude oil imports from Iran this month.
MRPL, which imported 3.9 million tonnes of crude oil from Iran in 2012-13, had not imported any oil from the Persian Gulf nation following insurance issues since April.
The company received a ship carrying 75,000 tonnes of crude oil from Iran on August 17 and has booked at least three other similar sized cargoes for delivery this month and the next, government sources said.
MRPL and Hindustan Petroleum Corp Ltd (HPCL) stopped imports from Iran in April as insurance companies declined to extend full coverage to refiners processing Iranian crude.
Sources said HPCL has, however, not imported any oil from Iran yet.
At the beginning of the fiscal, MRPL had budgeted for 4 million tonnes of crude oil from Iran out of its total requirement of 15.5 million tonnes.
MRPL has commitment from Saudi Aramco of Saudi Arabia to make up for all of the 4 million tonnes of oil it had budgeted for import from Iran, they said.
India’s largest insurer GIC has offered up to Rs 500 crore in reinsurance coverage to the MRPL refinery. While India has won US sanctions waiver to continue import of crude oil from Iran, the insurance coverage provided is inadequate to cover for liability in case of an accident.
MRPL Managing Director P P Upadhya had on July 31 stated that his company has taken a “calculated risk” to resume imports from Iran as oil from Persian Gulf nation offered better refining margin as also terms of imports like payment after 90-days of delivery were the best from any exporting nation.
Private refiner Essar Oil continues to buy Iranian crude.
For 2013-14, MRPL plans to import 2.75 million tonnes from Saudi Arabia and another 2.5 million tonnes from Abu Dhabi. Kuwait will give 1.35 million tonnes while 0.55 million tonnes will come from Oman and West Africa each.
Sources said Saudi Arabia has promised to give up to 4 million tonnes over and above the 2.75 million tonnes already signed for to make up for all of the shortfall in imports from Iran.
MRPL will get 1.7 million tonnes of Mumbai High oil produced by its parent Oil and Natural Gas Corp (ONGC) and about 0.40 million tonnes from Mangala oilfields of Cairn.
MRPL plans to buy 1.15 million tonnes of oil from the spot market.