The agreement between India and Sri Lanka for the joint redevelopment of Trincomalee oil farms signed on Thursday, on the eve of Chinese Foreign Minister Wang Yi’s visit to Colombo, came as a result of arduous efforts made by the two neighbors over the past three decades, Trend reported. Indian media.
During Prime Minister Narendra Modi’s visit to Sri Lanka in 2015, it was agreed that the Lankan subsidiary of Indian Oil Corporation (IOC) and Ceylon Petroleum Corporation (CPC) would develop oil tanker farms in Trincomalee on mutually agreed terms and a joint working team. (JTF) to be formed on the basis of an initial decision reached in 1987. However, the JTF has not yet met with local opposition. Five years later in 2020, discussions between the Indian High Commission in Colombo and the Lankan government have gained momentum, leading to the signing of three lease agreements between the IOC, the Chinese Communist Party and the Sri Lankan government on Thursday, people familiar with Indo-Lebanese relations explained.
The lease agreements, which reinforce India’s role in the project that has been discussed since the time of the 1987 Indo-Lanka Agreement, were approved by the Lanka Cabinet earlier this week. Sections in Lanka opposed the Rajapaksa government’s decision to involve India in a project negotiated by various governments in Colombo.
The IOC is a major player in Sri Lanka in sectors such as motor fuels, lubricants, fuels and bitumen. It has 206 fuel stations across Sri Lanka and is also a third partner in Ceylon Petroleum Storage Terminals Limited, a JV with CPC. The IOC unit spent $45 million initially to acquire the stake.
The oil storage tank farm in Trincomalee (Eastern Sri Lanka), also called the China Bay tank farm, consists of 99 tanks in two farms – UTF of 84 tanks and 15 LTF tanks. While one unusable tank was rebuilt into two smaller tanks of 5,000 tons, all the others are 10,000 tons each.
These tanks, spread over an area of about 677 acres, were built by the British in the 1930/40’s for use during World War II. The British government signed an agreement before granting independence to Sri Lanka in 1948, for the occupation of the TTF and the naval base. In 1957, at Sri Lanka’s request, the British government agreed to hand over the Trincomalee Naval Base with the facility to Sri Lanka.