Colombo: Sri Lanka is nearing completion of talks with India to reacquire the 99 World War II-era oil storage tanks leased to the Indian Oil Corporation in the strategically advantaged port district of Trincomalee in the country’s east coast, Sri Lanka’s Energy Minister Udaya Gammanpila said on Wednesday.
The Trincomalee Harbour, one of the deepest natural harbours in the world, was developed by the British during World War II.
Since 2003, the Lanka Indian Oil Corporation, the Sri Lankan subsidiary of India’s oil major Indian Oil Corporation (IOC), has the leasing rights to 99 tanks at the facility for a period of 35 years for an annual payment of $100,000.
Mr Gammanpila had earlier this year made his intentions clear to reacquire the tanks.
“On my instructions, the Ceylon Petroleum Corporation has already formed its new entity dedicated to handle the oil tanks once they are reacquired. Trinco Petroleum Terminal Limited has been already set up,” the minister said.
The talks are on and the progress would be revealed, Mr Gammanpila said.
The talks over the oil tanks are underway even as the Sri Lankan government is in the process of negotiating a credit line with India for the purchase of petroleum products amidst a foreign exchange crisis.
Sri Lanka shut its only refinery in November as they could not find dollars to pay for crude imports.
The foreign exchange crisis has affected the imports of essentials, leading to shortages in the island nation.
Former Prime Minister Ranil Wickremesinghe, who is now an Opposition figure, urged the government on Tuesday to expedite talks with India to facilitate the imports of oil and food.
He warned that the country would be facing a major food shortage crisis by April.
Meanwhile, Sri Lanka’s Central Bank on Wednesday announced that the country’s foreign reserves position has improved to remain at USD 3.1 billion.