Dec 14, Colombo: The Sri Lankan government has decided to take over a petroleum storage tank complex in Eastern Sri Lanka that was given to an Indian oil company on a long lease.

According to sources at the Ministry of Petroleum Industry the government plans to take back the China Bay tank farm in Trincomalee from the Indian Oil Corporation (IOC). A cabinet paper in this regard will be brought in the near future, sources said.

The China Bay petroleum storage tank complex was handed over to India's state-run Indian Oil Corporation in 2002 by the United National Party (UNP) government which was in power between 2002 and 2004. The government says that the hand over was not in line with the government standards.

The tank farm in 850 acres of land has 99 tanks each with the capacity to hold 12,100 metric tons of oil.

The government now expects to convert the petroleum storage tanks to a profitable venture with foreign investment.

The China Bay tank farm that connects to the Trincomalee harbor is of historic and strategic significance and it is the largest tank farm located between the Middle East and Singapore. It was built by the British in 1930s to supply fuel to Royal Navy ships.