New Delhi, April 14: Mangalore Refinery and Petrochemicals Ltd (MRPL) may be forced to drastically cut back production in the coming days as the surrounding region is facing an acute water crisis.
Sources said because of scanty rainfall in Karnataka, the flow in the local river has been reduced to a trickle and water from MRPL?s Sarapady reservoir is being diverted to Mangalore town for domestic consumption.
It is a touch-and-go situation for the refinery, which requires water to generate steam for processing crude and cooling the distillates.
The refinery processes around 40,000 tonnes of crude every day, which will be difficult to sustain as the water level in the reservoir has dropped to a low level. This would impact the profitability of the company as well.
MRPL is a state-of-the-art refinery and has in place modern systems for recycling the water. But it requires periodic transfusions of fresh water as well. Besides, the refinery has to keep critical reserves of water for fire fighting operations.
Although the official capacity of the refinery is 9.69 million tonnes, it operates at over 100 per cent capacity. MRPL processed over 11 million tonnes of crude during 2004-05 but with the water crisis affecting the region, the output during the current year could fall below this level.
The refinery was among the first to start producing Euro III-grade vehicular fuels and is supplying the southern markets through the Mangalore-Bangalore pipeline.
The company was taken over by ONGC close to two years ago following the exit of the Aditya Birla group from the loss-making joint venture with Hindustan Petroleum Corporation (HPCL). ONGC now owns a 74 per cent stake in MRPL, while the HPCL share has been reduced to 16 per cent.
MRPL, which had accumulated losses to the tune of Rs 1200 crore, had clocked a net profit of Rs 440 crore during the first year of the ONGC takeover.
In 2004-05, the profits of the company have gone up further and it has notched up a net profit of Rs 288 crore during the third quarter, which represents a six-fold increase over the corresponding figure for the year-ago period.
