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OOC signs deal with Lanka for investment in oil and gas

OOC signs deal with Lanka for investment in oil and gas

Oman Oil Company (OOC) has signed an MoU with Sri Lanka's Ceylon Petroleum Corporation (CPC) as the South Asian country seeks to reduce its dependence on Iranian oil in the face of ongoing US sanctions threats.

The agreement, signed by H E Nasser bin Khamis al Jashmi, undersecretary of the Ministry of Oil and Gas, on behalf of OOC and CPC chairman Dayanada Widanagachchi, will promote investment opportunities in oil and gas exploration and refining.

In a statement to Oman News Agency, H E Jashmi highlighted existing areas of co-operation, with OOC subsidiary Oman Trading International (OTI) - which sells Oman's crude through the Dubai Mercantile Exchange - already the major supplier of liquefied petroleum gas (LPG) to the Sri Lankan domestic market.

He said, “The MoU will enhance the existing cooperation between the sultanate and Sri Lanka in various areas related to the energy sector. OOC is always on the lookout for new investment opportunities yielding good economic returns within and outside the sultanate.”

Speaking to Muscat Daily in February, Talal al Aufy, chief executive of OTI, said the company was keen to expand into the Sri Lankan market as demand is set to grow.

“Currently, OTI is the main supplier of LPG to the Sri Lankan market and hence we are looking at expanding our business portfolio to supply other refined products and possibly crude, as Sri Lankan demand is set to grow in the future.”

Aufy added that the Oman blend of oil is not Sri Lanka's preferred option as the country's sole refinery can only refine Iranian crude, but Oman's product can be blended further to make refinement feasible.

He said, “The Oman blend is not necessarily their preferred option, nevertheless, it could be blended with other crudes and thereafter refined.”

Aufy added that as Sri Lanka resolves its civil unrest it is attracting attention from international investors because of the strategic positioning of its near shipping lanes and the size of its market.