The Board of Investment (BOI) is yet to receive an official withdrawal notice from Australian energy company United Petroleum (UP), despite the firm’s decision to exit the Sri Lankan market.
BOI Director General Renuka Weerakone confirmed that while the company had signed an agreement, no formal notification of withdrawal had been submitted.
“We cannot comment until we officially receive its notice,” she said.
Since 1 January 2024, the Ceylon Petroleum Corporation (CPC) has assumed control of 64 fuel stations previously operated by UP.
This handover followed the company’s decision to pull out, citing challenges in importing fuel.
As an interim arrangement, the CPC has been managing these stations while the termination process is being finalised.
UP initially entered Sri Lanka in August 2023, as part of a Government initiative to open the fuel retail sector to international players. The company had invested $ 27.5 million to acquire 150 existing fuel stations and secure rights to construct 50 new outlets.
However, less than a year later, the firm opted to withdraw, citing limited profitability and operational difficulties in the relatively small market.
Despite the high-profile departure, Energy Ministry Secretary Prof. K.T.M. Udayanga Hemapala downplayed its impact.
“UP signed an agreement, explored the market, and withdrew when it proved unfeasible for it to operate. This is normal behaviour. UP will face no repercussions from us,” he said, adding that the company had returned the fuel stations it had acquired.
CPC Managing Director Dr. Mayura Neththikumarage, commenting on the withdrawal, said that the termination agreement, approved by Cabinet, had already been signed.
“United Petroleum will not be pursuing damages or arbitration in line with the agreement. Instead it negotiated on the mechanism to settle the payment of taxes and licensee fees. UP had nothing to ask back from the Government and there was no dispute between the parties,” he said.
Dr. Neththikumarage added that the agreement with the Government was a final termination agreement.
“UP paid for licensing and we provided a list of 150 dealer-operated fuel stations, but UP only took over 64. When UP withdrew, it returned the stations. The CPC is not at fault,” Dr. Neththikumarage added, commenting on the speculation that United Petroleum was disgruntled over the matter.