Lankan oil refinery to get $ 1-bn

Sri Lanka: Iran will increase its investment in the expansion project of an oil refinery in Sri Lanka up to US$ one billion, Petroleum and Petroleum Resources Development Minister A.H.M. Fowzie said.

Mr.Fowzie said, 'Iran's President Mahmoud Ahmadinejad has allocated this amount which would cover 70 per cent of the required investment for the refinery's expansion, in the form of a 10 year loan, with a five year exemption period from payment of the loan's instalments.'

Fowzie added: 'Iran had earlier too provided the oil we need free from interest for four months.'

According to the report, Iran is the largest provider of crude oil to Sri Lanka.

Mr.Ashantha De Mel, Managing Director, Ceylon Petroleum Corporation (CPC) has said that the pilot study for increasing the production of Sri Lanka's only refinery from 50,000 to 100,000 barrels per day has been completed by Iranian oil engineers.

De Mel added: 'Iran would make the major part of the required investment for expansion of this oil refinery (70 per cent) and the CPC would cover the rest (30 per cent).'

Fowzie said the project would yield noticeable benefits for its investors.

He said: 'From the economic point of view my affiliated ministry too is interested in making investments there.'

According to Kyodo, De Mel who visited Iran in early April 2008, expects the project's executive phase to begin within the next three to four months.

Oil experts predict that Sri Lanka's oil refinery would increase its production after the Iranian oil engineers would end their work within the next two to three years.