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| Friday, 23 January 2004 |
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$ 45 million final payment completed : IOC goes full swing in petroleum business By Chamitha Kuruppu Indian Oil Corporation (IOC) yesterday received its licence from the Government to import, store and distribute petroleum products in Sri Lanka, Director General Public Enterprise Reform Commission (PERC) Manjula de Silva told the Daily News yeterday. The historic agreement between Asia's biggest state owned petroleum company IOC and the government became effective yesterday with the final payment of US $ 45 million out of a total consideration of US $ 75 million made by IOC. IOC paid an advance payment of US $ 30 million including the US $ 2 million paid early last year. IOC will invest US $ 100 million in Sri Lanka's petroleum industry, which includes transforming 100 petrol stations and rehabilitating and operating the Trincomalee oil tank farm. Lanka Indian Oil Company (LIOC) IOC's local venture signed three agreements with the Treasury on December 30, 2003. The agreements signed were the Share Sale Purchase Agreement relating to the transfer of 100% of equity in Independent Petroleum Marketers Limited (IPML) which comprises 100 filling stations, Share Sale and purchase Agreement relating to the transfer of one third of equity in the Common User Facility (CUF)or Ceylon Petroleum Storage Terminals Limited (CPSTL) and Share holder Agreement pertaining to CPSTL signed by Secretary to the Treasury, Ceylon Petroleum Corporation and LIOC. PERC recently extended the deadline for submission of binding bids for the third player selection for CPC restructuring. The restructuring of petroleum business in Sri Lanka commenced in the early 1990s. In terms of this strategy, several activities of petroleum business carried out by Ceylon Petroleum Corporation (CPC) were unbundled and formed as separate subsidiary companies of CPC. CPC is to be restructured under the Government's policy to liberalise the import and distribution of refined petroleum. Once the restructuring is completed the Government will set up a regulatory mechanism to ensure market competition, availability of adequate supply, service standards and consumer safety. According to PERC after restructuring the CPC will continue to be a fully Government owned company and will compete with the other two suppliers in the market. It will effectively control a third of the market through its service network and operate the refinery on commercial terms until the strategy for the way forward is determined by the government. Meanwhile, a press release by the Ministry of Economic Reform Science and Technology stated that Managing Director IOC M. NAgeswaran handed over the payment to Finance Secretary Charitha Ratwatte yesterday morning. Minister Milinda Moragoda, Ministry Secretary G.Hewagama, PERC Chairman Chrishantha Perera, IOC Company Secretary R.Nagendra and CPC Chairman Dahan Wimalasena were also present. |
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