brand logo

SL to buy UAE oil under credit facility 

21 Sep 2021

  • Oil company agrees to facility during discussion with Gammanpila
  • Forex crisis forced Sri Lanka to seek facility
By Imsha Iqbal  Amidst a dollar shortage in the country, Emirate National Oil Company (ENOC), an international company based in the UAE, has approved a credit facility for Sri Lanka to purchase crude oil from them, according to the Ministry of Energy.  Speaking on the recent discussions that were held with the Ministry of Energy, Minister of Energy Udaya Gammanpila said on his official Twitter handle on Sunday (19): “Negotiations were positively concluded with the Group CEO of Emirate National Oil Company (ENOC).” This indicated that the discussions held with CEO Saif Al Falasi and the senior officials of the UAE energy company resulted in agreement to provide crude oil to Sri Lanka by way of a credit facility.  All attempts made by The Morning Business yesterday (20) to reach the Ministry to obtain further information on the credit facility, proved futile.  The discussions, according to Gammanpila’s Twitter, took place in order to seek the possibility of importing crude oil and mineral oil products from the UAE under a long-term loan basis, owing to the current foreign exchange crisis Sri Lanka is facing.  On an earlier occasion, the Minister of Energy urged the general public of Sri Lanka that the country is facing a crisis situation due to the disruption of foreign exchange inflows owing to the pandemic, while reasoning out that the remaining reserves cannot be spent for the sole purpose of importing crude oil.  Thus, he further noted that the remaining but dwindling foreign exchange is an issue of utmost importance, pointing out that the prevailing emergency situation has arisen due to the expenditure related to the pandemic, i.e. vaccines and other essential medicines. Accordingly, Gammanpila stated that economical use of fuel at the moment would support the country with regard to foreign exchange.  Therefore, a meeting was held last month between the Minister of Energy and UAE Diplomatic Mission to Sri Lanka Acting Head Saif Yousif Al Naqbi.  In accordance with the UN Comtrade International Trade Statistics Database, Sri Lanka’s imports of crude oil from the UAE amounted to $ 404.84 million in 2020 amidst the importation restrictions.  Currently, he is expected to attend the Gastech Exhibition and Conference 2021 which supports the gas (liquefied natural gas [LNG], hydrogen) as well as energy industries, in Dubai this week.  Moreover, Gammanpila is anticipated to speak regarding the policies to support the rapid expansion of the hydrogen supply chain during the aforesaid exhibition and conference, which is to be held from today (21) till Thursday (23).  On the other hand, Ceylon Petroleum Corporation (CPC) is expected to receive a $ 1 billion loan from a lender in the US by the end of this year, which is set to be utilised to repay the loans CPC owes to state banks Bank of Ceylon (BOC) and People’s Bank. 


More News..