Crude Oil Refining and Processing Agreement between Maldives National Oil Company (MNOC) and other refineries

In the year 2003, Maldives National Oil Company signed a Crude Oil Refining and Processing Agreement with Ceylon Petroleum Corporation (Ceypetco), which is the national oil company of Sri Lanka. Under this agreement, MNOC will obtain crude oil directly from crude oil producing countries for processing in the Ceypetco refinery located in Sri Lanka. The refined and processed products will be taken back for consumption in the Maldives.

It is widely anticipated that the Crude oil Refining and Processing Agreement between the two companies will also lead to further enhance the bilateral economic relationship between the Government of Maldives and the Government of Sri Lanka.

In a contingency situation where MNOC may able to refine only a part of our refining needs at Ceyptco refinery, and in the interest of having a backup refinery, MNOC had also received confirmed approval to refine crude oil at the refinery of Singapore Petroleum Company Ltd (SPC) located in Singapore.

For many years the Government of Maldives had been contemplating to construct a petroleum refinery complex in the Maldives. However, due to reasons of economies of scale and excess refining capacity in the South Asia region, especially in India, the idea of constructing a refinery in the Maldives has been temporarily put on hold. The consequent strategy is to purchase a stake in an existing refinery in the South Asia region. Hence MNOC had been actively seeking the possibility of purchasing a stake in a refinery either in India, Sri Lanka or Singapore.