The Hindu Business Line : MRPL may firm up proposal to lift crude from PMT in May

Mangalore Refinery and Petrochemicals Ltd (MRPL) may firm up its proposal for lifting crude oil production of Panna-Mukta-Tapti (PMT) joint venture (between ONGC, Reliance and British Gas) in May.

According to sources, the move will be followed by a formal request from PMT to the Union Ministry of Petroleum and Natural Gas to amend the nomination clause in the product-sharing contract for de-nominating IndianOil (IOC), which was originally nominated for lifting the crude oil production. "We are still negotiating the detailed terms and conditions with MRPL and is expected to finalise the same shortly," a senior PMT official said.

He, however, added that the joint venture will appeal for a change in nomination only if it was financially beneficial to PMT. Panna-Mukta-Tapti oil fields currently produces close to 1.7 million tonne of `Bonny Light' variety of associated crude. The production will move up to 2.3 million tonne in late 2007 following the development of two more platforms. Bonny Light is a superior and costlier variety of crude available in a few fields (such as Neelam-Hira, Bombay High and PMT) in the West coast Neelam-Hira, Bombay High and PMT fields.

While the change in nomination will expectedly benefit PMT by approximately Rs 50 crore through higher recovery of transportation and handling charges (which has, for long, been the bone of contention between the joint venture and IOC), the move could be of strategic importance to MRPL.

Though designed to handle very high degrees of cheaper crude, MRPL has lately shifted its focus towards production of high value items with an eye on the export market.