Sri Lanka-UAE direct oil deal: Price negotiations underway

30 August 2025 07:51 am Views - {{hitsCtrl.values.hits}} 16 Bookmark

A A A

Join our WhatsApp Channel

Colombo, August 30 (Daily Mirror) -The Ceylon Petroleum Corporation (CPC) is currently engaged in price negotiation with the petroleum authorities of the United Arab Emirates (UAE) to purchase oil under a direct agreement, an official said.

Sri Lanka imports its entire petroleum requirement both in terms of crude and refined products, and selects suppliers for oil imports through an open tender process.

A CPC official told Daily Mirror that the government initiated talks with the UAE authorities for direct purchases.

He said that talks are underway with the main oil company in the UAE - the state-owned Abu Dhabi National Oil Company (ADNOC).

“We are now negotiating prices. We will opt for direct purchases if prices are competitive,” he said.

President Anura Kumara Dissanayake went to the UAE earlier this year on a three-day official visit at the invitation of UAE President Mohamed bin Zayed Al Nahyan.

Besides, Sri Lanka has entered into a tripartite agreement involving both the UAE and India for the development of Trincomalee as a petroleum hub. India and Sri Lanka are planning to put up a multi-product petroleum pipeline.

Also, Sri Lanka has planned to establish an oil refinery in Hambantota. It is a US $ 3.7 billion investment by Sinopec.

Chinese state-owned oil and gas giant China Petrochemical Corporation, commonly known as Sinopec, entered into an agreement with the Sri Lankan Government to expedite the construction of a state-of-the-art $ 3.7 billion oil refinery in the investment zone near Hambantota International Port (HIP). The agreement includes provisions to fast-track unresolved issues related to water access, land allocation, and taxes, marking the largest single foreign direct investment in Sri Lanka’s history.

The project is yet to take off because the government and the company are in discussion for the modification of the terms and conditions of the original tender.