Mangalore Refinery and Petrochemicals Ltd is exploring purchases of Venezuelan oil as it halts imports of Russian oil to comply with Western sanctions, its head of finance Devendra Kumar said on Monday.
The state-run refiner, which operates a 500,000-barrel-per-day refinery in the southern state of Karnataka, exports about 40% of its refined fuel output.
"We are in strict compliance with all sanctions in place and currently there is no Russian crude being imported," Kumar said on an analyst call.
The US in October sanctioned Russia's two largest oil producers - Rosneft and Lukoil - giving companies until November 21 to wind down dealings with them, while the EU has said from January 21 it will not take fuel from refineries that received or processed Russian oil 60 days before the bill of lading date.
"In the near term, we do not expect anything to disrupt our exports of finished products."
Kumar said higher margins on refined fuel exports are offsetting the loss of Russian oil.
The refiner meets about 40% of its crude needs through purchases from the Middle East, in addition to sourcing from spot markets and processing domestic oil.
He said MRPL is actively considering purchases of Venezuelan oil if commercial terms, including freight rates, are favourable.
India refiners Reliance Industries Ltd, Indian Oil Corp and Hindustan Petroleum Corp are also considering buying Venezuelan oil.
To boost its profits, MRPL has turned its focus to direct retail sales instead of selling refined fuels to other refiners.
The company plans to expand its retail fuel network to 500 outlets within three years from 200 and aims to operate 1,000 fuel stations within five years, he added.
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