LIOC’s Grease Plant to be ready by end 2020
Highlighting that the novel COVID-19 pandemic has dampened the profitability of oil companies, Lanka OIC (LIOC) said that the they would focus on other business segments and new opportunities such as the Grease Plant in Trincomalee, which is expected to be completed by the end of this year.
“With the oil and gas industry currently locked into a cycle of oversupply, low prices and volatility, the economic downturn, induced by the COVID-19 crisis, is likely to deal a major blow to many companies,” LIOC Chairman Ranjan Kumar Mohapatra said.
Although the global economy will eventually recover, the oil industry is likely to be faced with over supply, prolonged reduced demand triggered by lower economic activity and growing pressures to use greener energy sources, he told shareholders.
Considering the uncertainties involved in the Auto Fuel segment related to pricing and profitability, LIOC will focus on other business segments and new opportunities not only to de-risk the business profitability but also to ensure creating long term value, he said. According to him, the work on the proposed Grease Plant in Trincomalee is already in progress and is expected to be completed by end of 2020.
“This strategic investment will benefit the country by generating foreign exchange savings by manufacturing the requirement locally,” he said.
“The infrastructure development which is proposed will certainly augur well for LIOC with increased demand for petroleum products,” he said.