The Ministry of Energy said that development agreements have been signed for the Trincomalee oil tank farm complex.
The ministry revealed this in a statement.
However, Energy Minister Udaya Gammanpila told the media that 85 of the 99 oil tanks under Indian control will now come under Sri Lankan control by the agreement.
The relevant announcement of the Ministry of Energy is below…
Accordingly, the 2003 lease agreement regarding the Trincomalee oil tanks has been terminated and the oil tank complex will be divided between three institutions for a period of 50 years as follows.
01. Ceylon Petroleum Corporation – 24 tanks.
02. Trinco Petroleum Terminal Company – 61 tanks.
(Trinco Petroleum Terminals is a subsidiary of the Ceylon Petroleum Corporation, with 51% of the shares owned by the Ceylon Petroleum Corporation and 49% owned by the Indian Oil Company.
Its Board of Directors consists of 4 members appointed by the Ceylon Petroleum Corporation and 3 appointed by the Ceylon Indian Oil Company. The Chairman of the new company is also appointed by the Ceylon Petroleum Corporation)
03. Indian Ceylon Oil Company – 14 tanks.
Accordingly, the control of 85 of these 99 tanks (24 + 61 = 85) by the Ceylon Petroleum Corporation is a historic achievement in the history of Sri Lanka.
The agreements were signed on behalf of the Government of Sri Lanka by the Secretary to the Ministry of Finance S.R. Attygalle, Chairman of the Ceylon Petroleum Corporation Sumith Wijesinghe, Managing Director of the Ceylon Petroleum Corporation Buddhika Madihahewa and Managing Director of the Ceylon Indian Oil Company Manoj Gupta. Land Commissioner General Keerthi Gamage was also present at the occasion.
The new agreements will be presented to the Cabinet on January 10 and to Parliament on January 18. These agreements will be added to the official website of the Ceylon Petroleum Corporation on January 11.
The Trincomalee Oil Tank Complex was built in the 1920s by the British who occupied Sri Lanka. The tank complex consisted of 100 tanks with a capacity of 10,000 metric tons spread over an area of 827 acres. One of these tanks was destroyed by a Japanese air strike on April 9, 1942, during World War II.
According to Article 2 (iii) of the letter exchanged between the Prime Minister of India and the President of SL on July 29, 1987, the Trincomalee Oil Tank Group agreed to operate as a joint venture between India and Sri Lanka.
Under an agreement signed on February 7, 2003, all 99 tanks at the Trincomalee Tank Complex were handed over to the Ceylon Indian Oil Company on a 35-year lease basis.
However, the LIOC used only 14 tanks and the remaining tanks were gradually decaying without being used.
In 2017, the then government agreed to lease all 99 tanks to India on a 99-year lease basis under the Malik-Sushma Memorandum of Understanding. However, successful conclusion of 16 months of negotiations with India enabled us to reach a more favorable agreement.