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Sri Lanka to ink new agreements on oil tank farm with India


Sri Lanka (on 31st December 2021) announced its decision to sign three lease agreements on developing the strategic Trincomalee oil tank farm with India.


GS-II: International Relations (India’s neighbors, Economic relations and Landmark agreements)

Dimensions of the Article:

  1. About Trincomalee Oil Tank Farms
  2. About India and Sri Lanka agreements to work on the Oil Tank farms
  3. About the Indo-Lanka Accord

About Trincomalee Oil Tank Farms

  • The Oil Tank Farms in Trincomalee Harbor located in ‘China Bay’ on the Eastern coast of Sri Lanka was built by the British during World War II as a refuelling station.
  • The Trincomalee Oil Tank Farms have been bestowed with several favourable factors of location:
    • It is located on a deep-water natural harbour of Trincomalee and also
    • along some of the world’s busiest shipping lanes –
  • Hence, it is a highly attractive and rewarding to work with Sri Lanka on developing this oil tank farm.

About India and Sri Lanka agreements to work on the Oil Tank farms

  • The Indo-Lanka Accord 1987 proposed the joint development of the oil tank farm in the internationally coveted deep water natural harbour of Trincomalee.
  • In 2003, Indian Oil Corporation set up its Sri Lankan subsidiary called Lanka IOC to work on this oil farm.
  • A well-developed oil storage facility and refinery adjacent to the Trincomalee Port would have great economic value for both India and Sri Lanka.

About the Indo-Lanka Accord

  • The Indo-Lanka Accord was signed in 1987 on the pretext of the Civil War in Sri Lanka (between Tamils and Sinhala community).
  • The accord sought to balance India’s strategic interests, interest of people of Indian origin in Sri Lanka and Tamil minority rights in Sri Lanka.
  • The accord saw the placement of the Indian Peace Keeping Force (IPKF) in Sri Lanka to resolve the Sri Lankan Civil War.
  • The accord also resulted in enactment of the thirteenth Amendment to the Constitution of Sri Lanka and the Provincial Councils Act of 1987.

-Source: The Hindu

December 2023