CPC
mulls selling oil complex
The Ceylon Petroleum Corporation (CPC) is considering selling
its Rs. 10 billion storage facility being built at Muthurajawela
under plans to restructure the organisation, CPC chairman
Daham Wimalasena said.
The CPC
is preparing a strategy on how to restructure the organisation
and meet competition and demand in the future, he said in
an interview last week.
"One
option we have is to sell the Muthurajawela storage complex,"
he said. The storage complex with 29 tanks and a single point
buoy mooring to unload tankers is being built by China's Huanqui
Chemical Engineering Company.
It will
add 200,000 tonnes of storage capacity and almost double the
CPC's existing storage capacity. When completed by 2004, it
would have the capacity to store one month's requirements
of fuel and meet demand for the next five years.
The same
Chinese firm also rebuilt storage tanks at Kolonnawa that
were damaged or destroyed by an LTTE attack in 1995 and built
another six more tanks with a capacity of 60,000 tonnes.
Wimalasena
said he does not see the private sector entering the market
immediately because of the entry barriers they face. This
is because existing pipelines and storage tanks are owned
and operated by the CPC monopoly. "Real liberalisation
or privatisation" is still some way off, he said.
"There's
no way they (private sector) can bring products in bulk into
the country," he explained. "They would have to
use CPC facilities - pipelines and storage terminals - which
are strained to the maximum."
Laws would
also need to be changed abolishing the CPC monopoly, he added.
"The quickest way to bring products into the country
would be through the China Bay tank farm in Trincomalee,"
he said. These would need to be rehabilitated first. "The
second quickest way would be through our Muthurajawela storage
complex," he said. Wimalasena also said that "restructuring
also means we'll be sticking to our core business."
The corporation
is likely to be broken up into several entities with the CPC
sticking to its core business of refining and storage. The
Sapugaskande crude oil refinery and the Kolonnawa tank farm
will remain under the CPC.
But the
CPC intends to get rid of its agro-chemicals division and
out-source other functions as much as possible, he said.
The distribution
of petroleum products is one such area and already the CPC
has out-sourced about half of its fleet requirements. "We're
using private bowsers," he said. "We may further
reduce our fleet - there's a big difference in the cost of
our running the bowser fleet and the private sector running
the fleet."
The CPC
also intends to reduce its network of filling stations. "We
still have 350 CPC outlets," Wimalasena said. "We
aim to keep only 120 essential outlets. The others are all
dealerships granted to the private sector."
Prospecting
for black gold !
The Ceylon Petroleum Corporation intends to resume oil exploration
off the north-west coast in waters near India this year.
"We
are likely to go for open bidding before the end of the year
for blocks off the West coast," CPC chairman Daham Wimalasena
said.
The last
time the CPC went prospecting for oil was in the late 1970s
to 1984 when it drilled 11 oil wells, all of which turned
out to be dry.
These
surveys were stopped after the Eelam war intensified. This
was in the Gulf of Mannar region in the Cauvery Basin which
has long been thought to contain oil and gas reserves. India
has drilled over 700 wells in its territorial waters only
30 miles away.
Wimalasena
cautioned against raising expectations about striking oil,
pointing out that the usual ratio in the industry was that
only one out of ten test wells would strike oil with nine
being dry.
"We
don't want to raise hopes unnecessarily," he said. Last
year, the CPC undertook some new seismic studies and surveys
to collect data with the help of Australia's New South Global
and New South Wales University and Asian Development Bank
(ADB) funds.
These
studies covered detailed analysis and interpretation of data
about Sri Lankan sedimentary basins.
The geological
data was processed and analysed in Australia. The ADB has
also agreed to help the CPC to draw up Production Sharing
Contracts with prospective investors.
SMILES
OF VENDORS WORK WONDERS
Smiling vendors
Every Wednesday or Thursday to the 'pola' I walk,
And there with smiling vendors I talk.
Of prices and politics and so spend my time,
While buying thakkali and 100 grammes of lime.
I wouldn't dream of giving up my noisy pavement stroll,
For dolling up and pushing a trolley in some exclusive mall.
And the banks, with those clerks all painted, polished and
prim,
With faces so unsmiling, with words ever so grim.
I prefer my homely, friendly suburban branch,
With smiling managers who're never 'out for lunch!'
Business and companies have lost that human touch,
Families are left neglected to make that extra buck.
No need then, for seminars on how to improve one's style,
For business promotion all one has to do is SMILE!
Janine Vanigasooriya
Nugegoda
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