SL stops import of Iranian oil ahead of sanctions

19 September 2018 11:30 am - 13     - {{hitsCtrl.values.hits}}

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Sri Lanka has stopped crude imports from Iran and is actively switching to other crude grades, Petroleum Resources Development Minister Arjuna Ranatunga has told reporters in Fujairah, UAE.

According to The National, Minister Ranatunga has said Sri Lanka has stopped as soon as the US sanctions were announced.

“We didn’t buy [directly] from Iran. We buy from Singapore, Dubai, Fujairah. We’re looking at signing government-to-government agreements over the next couple of months. We’re looking at long term agreements,” he said.

Sri Lanka, one of the smaller South Asian consumers of oil, was importing nearly all of its 50,000 barrels per day from Iran, which was then refined at the country’s sole refinery built to run on light crude imported from the Middle Eastern producer.

Following the threat of snapback sanctions against Tehran by the White House, Sri Lanka’s state oil company had earlier mulled paying for its oil imports and debts with tea. Sri Lanka is the world’s second-biggest producer of the commodity, behind Kenya. Iran, a big consumer of tea, imports 90 per cent of the commodity from India and Sri Lanka.

Colombo, however, is close to securing alternative supplies from other producers to ensure it didn’t fall afoul of sanctions, said Mr. Ranatunga.

"We have identified a couple of crude [grades] and we have already started using them. That is one of the problems we have because the crude is very expensive as well. So we’re looking at [securing] cheaper crude and we’re very successful at that,” he said.

Sri Lanka drew up contingency plans in 2012 to import oil from Saudi Arabia and Oman, when nuclear-related sanctions were imposed on Tehran.

Mr. Ranatunga declined to comment on where Sri Lanka is currently importing crude from.
The country is still on track to expand capacity at its Sapugaskanda refinery to 110,000 bpd, a scheme that was earlier planned to be developed by Iran, said the minister. But finding a replacement is expected to take up to four years, he said.

“We’re looking at 110,000 to 125,000 bpd capacity, and we need the 110,000 bpd by 2025,” he told reporters.

The refinery, which is expected to cost $500 million, has received nearly five proposals, from companies in China, South Korea, the Middle East and Singapore.

Sri Lanka, which announced a licensing round earlier this year, has signed an agreement with US energy services firm Schlumberger and is in discussions with French energy major Total regarding gas exploration, said Mr. Ranatunga.

The country has offered the Mannar and Dorado basins off its western coastline for gas exploration.

The licensing round will close next month, with preliminary results indicating potential for up to 1.8 trillion cubic feet of gas, said Mr. Ranatunga.

Full-scale exploration after data analysis will take another six years, he added.

Sri Lanka meets its oil requirements through imports alone. However, the end of its 25-year long civil war with the separatist Liberation Tigers of Tamil Eelam in 2008 has revived interest in developing its own oil and gas resources.

  Comments - 13

  • Ceylon Wednesday, 19 September 2018 11:50 AM

    Turn to solar power.whole world turning for it and next 20 years solar is the main electricity generator in world.china,india now in high speed for solar power.srilanka is very slow.invite chinese,japanese,indian and others to set up factories and companies.in 10 years enough to self suffieciant in power from.solar.

    Mohamed Niyas Wednesday, 19 September 2018 12:54 PM

    Sri Lanka stopped buying Iranian Light Crude Oil long ago in 2012. There is nothing to stop now.

    NO BACK BONE Wednesday, 19 September 2018 01:27 PM

    Bowing down to Uncle Sam

    Lokusalli Wednesday, 19 September 2018 05:29 PM

    So ,your happy for for the money and aid ...just not their concern about human rights ...wait until you're locked up with no evidence against you

    Appeal to Russia and China. Wednesday, 19 September 2018 01:29 PM

    Russia ,China please free the world on being hooked to to Petro dollar-ntge sooner the better

    DillonDP Wednesday, 19 September 2018 01:54 PM

    I liked your ding comment "So we’re looking at [securing] cheaper crude and we’re very successful at that" Successfull my

    Mr X Wednesday, 19 September 2018 02:00 PM

    A step in the right direction.

    ransam Wednesday, 19 September 2018 03:45 PM

    Another reason to keep increasing fuel prices during coming months

    Nadaal Wednesday, 19 September 2018 03:46 PM

    Hello Minister, SriLankans are very gullible and always believe in all the lies dished out by the shameless mouths of our Ministers. This is a very thinly veiled carrot. We are awaiting the elections to show our fristrations

    ravin Wednesday, 19 September 2018 03:50 PM

    What we know is sapugaskanda refinery was built for the purpose of refining Iranian type of crude oil. Dose the minister have an idea of selling the refinery machinery and make billions? like Kanthale sugar factory- president former chief of staff.

    Jiff Wednesday, 19 September 2018 04:23 PM

    Rupee will further depreciate because of trying to please world powers

    chandu Thursday, 20 September 2018 11:24 AM

    Economy down the drain ! Great plans to destroy SL by Yahapalanaya.All these stooges will run away to other countries when election results roll in ! If there is one?So sorry !

    KALPA Thursday, 20 September 2018 12:04 PM

    Sri Lanka is an american puppet no wonder.


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