NO OIL BUT LOAN FROM IRAN
By Sulochana Ramiah Mohan
The cash strapped government has sought a US$ 2 billion loan from Iran even as it states that Iranian oil will not be purchased after June due to sanctions that have been imposed.
Minister of Petroleum Resources, Susil Premajayantha said his ministry is seeking a US$ 2bn loan from Iran to expand the Sapugaskanda oil refinery with new units, while it is seeking US$ 500mn from local banks to upgrade the existing plant.
US$ 500mn SOUGHT from local banks
By Sulochana Ramiah MohanThe cash strapped government has sought a US$ 2 billion loan from Iran even as it states that Iranian oil will not be purchased after June due to sanctions that have been imposed.
Minister of Petroleum Resources, Susil Premajayantha said his ministry is seeking a US$ 2bn loan from Iran to expand the Sapugaskanda oil refinery with new units, while it is seeking US$ 500mn from local banks to upgrade the existing plant.
Consequent to this request by the government, the Iranian ambassador in Sri Lanka, Dr. M.N. Hassani Pour is now in Iran to find a company that could finance the project.
“At the moment, the old refinery produces 18% gasoline, 20% gas oil and 30% high sulfur furnace oil. We need to upgrade the refinery to produce more gas oil and gasoline,” the minister explained.
He went on to say that the government would source oil from Oman as a last resort once the sanctions take effect in June this year. “Oman oil is not as costly as many say. We have used Oman oil earlier and Oman is not associated with the Organization of Petroleum Exporting Countries (OPEC), and therefore they can determine the price. In fact we expect the price to be cheaper than Iranian oil.” He also said that the expansion project was initially estimated at US$ 1.3bn but has since gone up to US$ 2bn. The contract to carry out a detailed feasibility study of the project was awarded to M/s KBC Advanced Technology (Pvt) Ltd., Singapore.
Under the expansion project, the Ceylon Petroleum Corporation bought 35 acres of land near the Sapugaskanda oil refinery, paying Rs. 1000 mn as compensation to the affected parties. Ninety per cent of those affected have been compensated so far, the minister said.
“At the moment, the old refinery produces 18% gasoline, 20% gas oil and 30% high sulfur furnace oil. We need to upgrade the refinery to produce more gas oil and gasoline,” the minister explained.
He went on to say that the government would source oil from Oman as a last resort once the sanctions take effect in June this year. “Oman oil is not as costly as many say. We have used Oman oil earlier and Oman is not associated with the Organization of Petroleum Exporting Countries (OPEC), and therefore they can determine the price. In fact we expect the price to be cheaper than Iranian oil.” He also said that the expansion project was initially estimated at US$ 1.3bn but has since gone up to US$ 2bn. The contract to carry out a detailed feasibility study of the project was awarded to M/s KBC Advanced Technology (Pvt) Ltd., Singapore.
Under the expansion project, the Ceylon Petroleum Corporation bought 35 acres of land near the Sapugaskanda oil refinery, paying Rs. 1000 mn as compensation to the affected parties. Ninety per cent of those affected have been compensated so far, the minister said.
