MRPL to boost heavy oil processing, cut fuel oil output

Mangalore Refinery and Petrochemicals Ltd will change its crude mix and production pattern in the year to March after commissioning of a coker unit to boost its profitability, a top company executive said on Thursday.

MRPL's current crude processing is tilted in favour of costlier lighter grades and produces a significant volume of fuel oil, which normally sells at a discount in global markets.

"I will have more flexibility in operations (with the commissioning of the coker) to improve margins. I can go for more of heavier grades and increase production of light distillates," MRPL Managing Director P P Upadhya said.

MRPL, which runs a 300,000 barrels per day (bpd) refinery in Karnataka, will boost output of premium products like naphtha and gasoil, and cut fuel oil production in the fiscal year that began on April 1.

"I can make it (fuel oil production) zero but depending on margins and market dynamics I will tweak my product slate. If I get better margins on fuel oil I will produce it otherwise I will produce light distillates," Upadhya said.

MRPL is in talks to buy at least 10,000 bpd of Iraqi oil in this fiscal year and plans to retain its imports from Iran at 80,000 bpd if sanctions against Tehran are not eased, he said.

The state-run refiner currently buys Iranian mix oil from the OPEC member and after commissioning of the coker unit it aims to lift heavier grades like Soroush and Nowruz, he added.

It aims to buy as much as 40,000 bpd of Latin American grades in the fiscal year, its director for refinery operations Vijay Joshi said in January.

In January MRPL became the first Indian refinery to buy Argentina's Escalante grade for delivery in April-May.