Indian Oil Corporation (IOC) is ready to help Sri Lanka cut its heavy dependence on Iranian crude imports, IOC subsidiary Lanka IOC said.
A top Lanka official said it was ready to help in a $2 billion upgrade of Sri Lanka’s 50,000 barrels per day refinery which state-owned Ceylon Petroleum Corporation (CPC) operates with 93 per cent of its crude from Iran and the rest from Saudi Arabia.
“We have expressed our willingness that IOC or Lanka IOC would be interested in doing something with the refinery in terms of refurbishing or revamping or expanding or whatever the mechanism,” Suresh Kumar, the Managing Director of Lanka IOC said in an interview.
“We would expect that investment would be easily in the order of $1.5-$2 billion. We are willing to do that.”
He said Lanka was also ready to import more refined oil products if the island nation faces shortages of fuel due to drop in Iranian crude imports.
Sri Lanka has been long negotiating a credit of up to $2 billion with lenders including China, Russia, and South Korea to double the capacity of the decades-old oil refinery, after the government failed to find an investment partner for a proposed Iranian-backed overhaul.
Sri Lankan rupee ended 0.6 per cent firmer on Friday as exporters and a state bank bought the currency a day after the central bank asked the market to step in to help, dealers said.
The rupee ended at 129.90/130.00 against the dollar, up from on Thursday’s close of 130.50/131.00, on thin volume, due to lingering depreciation fears.
“Exporters sold dollars, while the market also saw a state bank selling $3 million to the market, which helped the currency to recover,” a currency dealer said on condition of anonymity. The rupee has recovered 2.7 per cent since it hit an all-time low of 133.50 on Wednesday.
On on Thursday central bank officials at a meeting with currency dealers had called for an end to speculation that it said had hurt the currency and asked them to try to convince exporters to convert their dollar holdings.
The rupee has depreciated 12 per cent since the central bank stopped intervening to defend a specific price on Feb.9, and 15.1 per cent from Nov.19, when the government allowed a 3 per cent devaluation.
The state-owned Bank of Ceylon on Thursday raised $500 million via a five-year bond at the tight end of the 6.875-7 per cent guidance. The central bank said it expected the bond proceeds to support the rupee, but traders were less optimistic.
The stock market edged down 0.08 per cent, or 4.49 points, to 5,440.52 with investors worried about the rupee, rising interest rates and slowing economic growth.