Iran-Lanka to sign MoU on crude oil

ROHAN MATHES in Teheran

Petroleum and Petroleum Resources Minister A. H. M. Fowzie asserted that President Mahinda Rajapaksa and his delegation has been highly successful in achieving the goals envisaged in the Iranian tour.

Minister Fowzie told the Daily News in Teheran yesterday that as a result of the bilateral discussions held with the Iranian President and other high officials last Monday, Iran is ready to sign an MoU with Sri Lanka in the provision of crude oil on credit for four months and a further grace period of three months sans any interest payment.

The refined output of the Sapugaskanda Oil Refinery which is around 50,000 barrels per day, is to be enhanced to around 100,000 barrels with the financial assistance from Iran. The Iran Government will do a feasibility study of the project and provide around US Dollars 700 million loan to be paid back within 10 years.

He further said that at the Business and Investment Forum which was well-attended by enthusiastic and high level prospective Iranian businessmen and investors last Monday, it had been revealed that there was a gigantic trade deficit of around US Dollars 700 million in Iran's favour, by the exchange of crude oil and tea between the two countries.

Fowzie said Iran had agreed to form 'Joint Ventures' and buy more tea, furniture, tyres and vehicle spare parts among others to bridge or minimise this deficit.

"These agreements will undoubtedly help Sri Lanka to come out of the temporary economic crisis," the Minister added. Meanwhile, Chairman Laugfs Holdings Limited W. K. H. Wegapitiya who is also a member of the 30-member Sri Lankan business delegation told the Daily News that he had discussed with many Iranian investors engaged in the gas industry, in obtaining 'natural gas' and the required chemicals and other accessories from Iran.

"The discussions were fruitful and will be finalised today," Wegapitiya added.