Sri Lanka has to fix its petroleum conundrum | Sunday Observer

Sri Lanka has to fix its petroleum conundrum

4 September, 2022

Petroleum supplies seem to be at the core of all Sri Lanka’s present problems in getting its free market export import economy running smoothly, but the heart of the matter is that our only refinery built in 1969 is unable to supply all the required refined petroleum products including premium diesel and 95 octane petrol.

The handling capacity of our only refinery in Sapugaskanda is about 35-40 million barrels of crude oil per day but we need an oil refinery 4 to 5 times bigger and also capable of handling every type of crude oil that could produce all our refined requirements.

The Asia Pacific region which has a limited amount of proven crude oil reserves has to import crude oil from the Middle East and Africa to be able to run their oil refineries meeting their economic needs. For example Singapore has no crude oil of its own but refines over one million barrels of crude oil per day and is able to meet much of the demand of the South East Asian region. Even Australia gets 60 percent of its refined petroleum products from the Asian refineries. The intrinsic strength of Asian economies is its capacity to refine crude oil. What we have to learn from Singapore is to have a thriving oil refining industry of our own and also supported by other oil companies like those that we chased away in 1964 by the nationalising of our nascent oil industry.

The Far East Command of Britain which was in Ceylon had to be relocated to Singapore due to policies of our Prime Minister SWRD enacted after 1956 that helped Singapore to be the best performing S.E.

Asian economy of the world today. I doubt any of the British or US companies we had would like to return but we could try again like I did for Sri Lanka as adviser (2011-14) to find our crude oil reserves like they have done for Saudi Arabia (1935), and even Israel recently.

We could also build a new oil refinery near the Eastern Oluvil Sea Port of Sri Lanka that lies very much idle today. Indonesia is no more a member of OPEC but is now more into crude oil refining and is a rising star in South East Asia.

The Petroleum Development Authority (PDA) is in a dilemma unable to find our crude oil reserves and while the country is burning it fiddles with a bizarre oil exploration model ( of 783 offshore pieces) which its Director General thinks is a blockbuster, and this is the state we are in petroleum exploration. We have missed the bus both in oil exploration and in crude oil refining and this situation is sadly of our own making. Today in 2022 Sri Lanka lies with both its Achilles tendons broken, and our socio economic tapestry in disarray with our natural and human resources not being used judiciously.

Trevor Jayetileke B.Sc. (Ceylon),
Upstream petroleum consultant and freelance writer
Former Adviser to the Ministry of Petroleum Resources Development of Sri Lanka.
Chairman of the Australia Sri Lanka Council Inc., Melbourne (estb.in 1994)

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