India and Sri Lanka will jointly operate the oil storage facility at the strategic eastern port town of Trincomalee, Petroleum Minister Chandima Weerakkody said today.
At least 73 of the 99 storage tanks in Trincomalee is to be managed under a new equity arrangement between the two countries, Weerakkody said.
To operate the 73 tanks "we will have the joint venture running", Weerakkody said.
Sri Lanka will have the ownership of 10 more tanks while another 14 will be handed to India on a long lease, he said.
The petroleum minister had presented a Cabinet paper last year for the joint venture and he today said negotiations were still underway on the matter.
He said the Indian interests in the oil storage tanks date back to 2003 when the entire 99 operational tanks were given to Indian Oil Corporation under an agreement.
Sri Lankan President Maithripala Sirisena faces criticism from Opposition leaders over the government's alleged plans to sell state assets. The criticisms are mainly directed towards Sri Lanka-China partnership to develop the southern port of Hambantota.
Former president Mahinda Rajapaksa had recently said the government plans to give the Hambantota port to China, and the Trincomalee and the Jaffna ports to India and the US respectively.
During last week's Cabinet meeting, Prime Minister Ranil Wickremesinghe stressed the need to maintain good ties with India while negotiating with China.
Sri Lanka is said to owe China about USD 8 billion for loans obtained by the Rajapaksa regime between 2005 and 2015.
The Sirisena government hopes to recover USD 1.2 billion by leasing the Hambantota port and the adjacent industrial park to be set up by China.