Last week, the United States Trade Representative visited Sri Lanka and met with President Anura Kumara. Their discussions centred on the agreement reached regarding tariffs imposed on Sri Lanka by President Trump. Trump had significantly reduced these tariffs, but what he expected from Sri Lanka in return has not yet been revealed in terms of commitments. The U.S. trade representatives may have come to meet Anura Kumara to discuss this matter.
Following the arrival of the trade representatives, the Chairman of the Ceylon Petroleum Corporation announced that tests conducted prior to purchasing oil from the United States had been successful. Accordingly, he stated that tenders would be called from next month to import oil from the U.S., according to media reports.
It has been reported that Sri Lanka agreed to purchase oil from the United States in order to secure the tariff reductions granted by Trump. The U.S. trade representatives may therefore have come to ensure that commitment is implemented. It is possible that the CPC Chairman made his statement about purchasing U.S. oil as a result of the visit.
In addition to selling oil to Sri Lanka, the U.S. has submitted several proposals for energy projects in the country. The main ones involve Kerawalapitiya and Sapugaskanda. During Mahinda’s government in 2014, a joint venture between Ventech Engineering, based in the United States, and a company from the United Arab Emirates submitted a proposal to expand the Sapugaskanda oil refinery. CPC officials hailed this as a major achievement. However, after Mahinda’s defeat in 2015, the project was abandoned. Later, in 2019, under the Maithri–Ranil government, the project to modernise the Sapugaskanda refinery was handed over to the American company Honeywell UOP, which had originally been involved in designing the refinery.
That project too was halted following the collapse of the Maithri–Ranil government.
Subsequently, during Gotabaya’s government, an agreement was signed to lease part of the Kerawalapitiya Yugadanavi power plant to the American company New Fortress Energy. However, due to opposition from ministers within the government, the agreement was later cancelled. Now, once again, the U.S. has submitted a fresh proposal for Kerawalapitiya.
It remains uncertain how China and India, the main stakeholders in Sri Lanka’s energy projects, will react to the U.S. entering the country’s energy sector through Trump’s tariff policy.
