Sri Lanka’s Energy Ministry looking at issuing refining licenses
Sri Lanka’s Energy Ministry is reportedly looking at granting the Ceylon Petroleum Corporation (CPC) with the authority of issuing licenses to refine oil products in Sri Lanka under the revisions to be made to the Ceylon Petroleum Corporation Act No. 28 of 1961.
Accordingly, the Cabinet of Ministers has reportedly approved amendments of the Ceylon Petroleum Corporation Act which is Act No. 28 of 1961.
Sri Lanka’s Minister of Energy Udaya Gammanpila has told The Morning that there are only two amendments in the CPC Act that have become the need of the hour, of which one was the aforementioned licensing authority.
Secondly, the Minister has noted that the definition of “petroleum” needs to be changed to meet the present day requirements, “because there are many more petroleum products in the world. However, the Act No. 28 of 1961 does not include all these products, which obviously need to be included”, he has added.
On a separate note, Gammanpila has further stated that the Ministry is set to establish a refinery with the production capacity of 100,000 barrels per day (bpd), and to upgrade the existing refinery capacity to 45,000 bpd from a mere 13,000 bpd, which is the present capacity.
“We are going to finance it on a Build-Operate-Transfer (BOT) basis,” Gammanpila has said. However, at the moment, the CPC has the exclusive rights to refine crude oil in Sri Lanka.
“Therefore, in order to accommodate this BOT Basis, we have to amend the CPC Act 28 of 1961,” he has explained.
Quoting the new CPC definition, he has said: “Petroleum resources means crude oil, natural gas, and hydrocarbons, whether in natural liquid, gas, solid, or semi-solid state, hydrates of oil and gas, sulphur, or other substances associated with hydrocarbon that are recovered by petroleum operations.”
The proposal has been furnished by Minister Gammanpila to revise and amend the CPC Act, as certain provisions of the said Act were found insufficient to cater to present-day requirements.
Sri Lanka’s energy sector is gearing to meet the growing demand in the country due to expansion in the country’s key economic sectors as well as the ongoing development programme. Sri Lanka is fast becoming a business hub in the South Asian region given it’s geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country. All these have created a demand for power and energy sectors opening up business/investment opportunities in the two sectors.
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