The state oil entity Ceylon Petroleum Corporation (CPC) entered an MoU with Lanka IOC to grant a long-term lease for operating the storage tanks at Trincomalee for 35 years for an annual fee of USD 100,000.
Sri Lanka in March announced that it planned to take back tanks that were not being used by the Lanka IOC. The move was seen as an immediate fall out from India voting against Sri Lanka at the UN Human Rights Council on rights accountability.
“If they are not using the tanks, we can use them,” government spokesman and Minister Keheliya Rambukwella told reporters in March.
He denied any links between the Colombo's decision to ask the oil tanks back under its control and the India's vote against Sri Lanka.
Since then, the decision by Prime Minister Manmohan Singh to skip the CHOGM summit held here last month has added to the uneasiness in the relationship across the Palk Strait.
