India's MRPL offers euro payment for Nile Blend

NEW DELHI - Indian state-run Mangalore Refinery and Petrochemicals Ltd has offered to pay in euros for spot purchase of Sudanese Nile Blend crude and traders said most sellers preferred the currency as Sudan faced U.S. sanctions.

"We have given this additional option to increase competition. It is based on the market feedback," MRPL (MRPL.BO) Director of Finance L.K. Gupta told Reuters on Monday.

The company issued an amendment on Friday to its latest tender, allowing euro payments.

Gupta did not elaborate, but a trade source said: "Market was not offering Nile Blend in MRPL's import tender because most of us need payments in euros for Nile Blend and MRPL was only making payments in dollars."

The trader said MRPL had been regularly seeking Nile Blend, which suits its refinery, in its spot tenders but never bought the grade through spot tenders as it did not get good offers because of dollar-payment clause.

Most sellers of Nile Blend crude prefer payments in euros because of the United States' sanctions on Sudan.

The United States imposed economic sanctions on Sudan in 1997 and labeled it a "state sponsor of terrorism". Khartoum has been pushing for full normalization of relations with Washington and an end to more than a decade of U.S. sanctions.

MRPL, a subsidiary of state-run exploration firm Oil and Natural Gas Corp (ONGC.BO), runs a 194,000-bpd coastal refinery in the southern Indian state of Karnataka.

ONGC frequently sells its share of Nile Blend crude in Greater Nile project to MRPL.

In the current financial year, MRPL bought 10,000-12,000 bpd of ONGC's share of Nile Blend and it aims to buy 10,000 bpd in the next fiscal.

ONGC has 25 percent stake in Greater Nile project, China National Petroleum Corp (CNPC) owns a 40 percent share and Malaysia's state oil company Petronas hold 30 percent stake.

Sudan's national oil company Sudapet owns 5 percent.

(Reuters)