Refiners tussle over crude share from Mumbai High

Apr 02 2014, 16:11 IST
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We have asked government to give IOC more share of this crude oil in 2014-15,” said a senior IOC official. (Reuters) We have asked government to give IOC more share of this crude oil in 2014-15,” said a senior IOC official. (Reuters)
SummaryPublic sector refiners – IOC, BPCL, HPCL and MRPL – are at loggerheads over crude oil share from the Mumbai High fields.

Public sector refiners – IOC, BPCL, HPCL and MRPL – are at loggerheads over crude oil share from the Mumbai High fields.

“We want more Mumbai High crude because we can make better use of it in our petrochemical complexes in Mathura and Panipat. We have asked government to give IOC more share of this crude oil in 2014-15,” said a senior IOC official.

ONGC produces about 15 million tonnes of crude oil every year from its Mumbai High asset. Of this, BPCL gets the big chunk of 47.2%, followed by HPCL (23.8%) and IOC (18.4%). ONGC-owned MRPL gets 10.5% of the crude share. But BPCL and HPCL are not ready to let go of their current share of this crude oil. HPCL, too, wants at least 5% more of this oil, said a senior company official. Every financial year, the ministry of petroleum and natural gas decides on the quota.

The high-quality, low-sulfur crude oil produced from Mumbai High and Neelam Heera fields is in high demand. The crude oil pumped out from Mumbai High and Neelam Heera fields are collected at Uran in Navi Mumbai. It is further transported through pipelines to BPCL and HPCL refineries in the same state, while its is shipped to Gujarat for IOC.

BPCL and HPCL that operated refineries in Mumbai claim that they should get more share because of their location. Mumbai High is ONGC’s mainstay, accounting for more than 40% of the company’s output. As with all old oilfields, the problem here is that its yield has been declining. Outside Opec, all oilfields around the globe that have been in production for more than three decades have historically seen more than 8.5% annual drop in yield. At its peak in 1989-90, the field yielded a little over 20 mt of crude. Mumbai High was no exception, but with two redevelopment plans already executed, ONGC has been able to arrest the decline at 2.23%.

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