US$ 3.6bn Oman fuel credit line abandoned over conditions

The government has decided not to pursue the proposed US$ 3.6 billion fuel credit line with Oman due to certain conditions in the agreement.

“As we discussed the conditions in the agreement at length, there were some concerns related to the conditions.

Therefore at this juncture, the Oman proposal has become an inactive proposal,” Co-cabinet Spokesman and the Minister of Mass Media, Dullas Alahapperuma told the weekly Cabinet media briefing held in Colombo yesterday.
In early October, the Cabinet of Ministers approved a proposal to enter into a loan agreement for a US$ 3.6 billion credit line with the Sultanate of Oman to finance petroleum procurement for a period of 
one year.

The proposed credit line was to be paid back in 20 years with a five-year grace period.

Although, the two countries agreed on the credit line in principle, the Sri Lankan government had not approved the condition putforward by Oman to allocate them with an offshore block in the Mannar basin to explore oil, in lieu of the interest payments of the credit line. Sri Lanka secured US$ 500 million fuel credit line from India recently.