Emirates National Oil Company (Enoc) said on Saturday a cargo of its diesel which was returned by Sri Lanka on Thursday as below standard was inspected before shipment by an independent inspector.
Sri Lanka's oil minister said on Thursday Enoc had been removed from its approved supplier list after Ceylon Petroleum Corporation (Ceypetco) returned the 40,000-tonnes cargo, which he described as "not up to the required specifications".
"The gas oil cargo for Ceypetco was loaded and dispatched from Jebel Ali, after the cargo was inspected and verified as conforming to contractual specifications by an independent inspector mutually agreed by Enoc and Ceypetco," Enoc said in an emailed statement.
It added that a cargo inspection at the discharge port in Colombo found the fuel did not meet the specifications and that it was investigating the reason for the discrepancy between the test results.
Sri Lanka has had to import more refined products after Western sanctions on Iran have hit imports of the main crude used for the country's only refinery, which has a 50,000 barrel-per-day capacity.
Ceypetco's managing director said on Thursday the return of Enoc fuel would not cause a shortage.
Enoc and Sri Lanka have disagreed in the past about fuel cargoes.
The Dubai-owned oil company said in response to comments by Oil Minister Priyadharshana Yapa that it had paid compensation for a sub-standard gasoline cargo it provided in 2001 that complied with contractual specifications.
ENOC in its statement said the company has a strong, positive and long-term working relationship with key partners in the oil sector in Sri Lanka.
"Over the years, we have served the country’s oil sector through supplies that have met the highest quality specifications. In fact, Enoc has since 2012 successfully delivered approximately 532,000 metric tonnes of crude oil and petroleum products to Ceylon Petroleum Corporation (CPC)," it stated.
“As an organisation committed to quality, we review any feedback regarding our supplies seriously," it added.
Enoc said that following the inspector’s report and pending its investigation, CPC had requested the Emirati oil firm to provide an alternate cargo.
"As requested, Enoc promptly made arrangements for an alternate cargo to be delivered. In the course of making the necessary arrangements, the company was informed that CPC no longer required the alternate cargo," it stated.
Nonetheless, as Enoc’s service commitments to CPC, we" will continue to render all such support and assistance to CPC as may be required," it added.
Significantly, Enoc pointed out that CPC had not suffered any actual damages or losses as no cargo had been discharged, unlike reports by a section of the media.
Also in the statemnent Enoc clarified the facts with regard to a gasoline component cargo sold to CPC on FOB basis in 2011.
“In 2011, following a critically low stock position, CPC had requested Enoc to supply gasoline urgently. ENOC informed CPC that it did not have gasoline that met CPC’s specifications but was subsequently requested to supply any available gasoline component stock to CPC to address the gasoline shortage situation in Sri Lanka," the UAE oil firm said in the statement.
Ceylon Petroleum Corporation had in August taken Vitol off its supplier list after it said the trader had supplied 20,000 tonnes of sub-standard diesel.
Vitol denied the allegations and said the cargo in question was tested in accordance with international standards by CPC inspectors before it was discharged.-Reuters and TradeArabia News Service