Ceylon Petroleum Corporation facts for kids
 |
|
| Government-owned corporation | |
| Industry | Oil and gas |
| Founded | 1962 |
| Headquarters | CEYPETCO House, 609 Dr Danister De Silva mawatha, Colombo 9
,
|
|
Number of locations
|
 1,302 (2019) |
|
Area served
|
Sri Lanka |
|
Key people
|
Mohamed Uvais Mohamed (Chairman) |
| Products | Petroleum Natural gas Motor fuel Aviation fuel Petrochemical Lubricate |
|
Production output
|
280,000 bbl/d (2021) |
| Revenue |  Rs 531 billion (2020) |
|
Operating income
|
Rs 44 billion (2020) |
| Rs 1 billion (2020) |
|
| Total assets | Rs 349.69 billion (2020) |
| Total equity | ▲ Rs −529 billion (2020) |
| Owner | Government of Sri Lanka |
|
Number of employees
|
2,616 (2019) |
| Parent | Ministry of Petroleum Resources Development |
| Subsidiaries | Litro Gas |
Ceylon Petroleum Corporation, often called CEYPETCO (CPC), is a big company in Sri Lanka that deals with oil and gas. It was started in 1962 and is completely owned by the Government of Sri Lanka. CEYPETCO is the largest oil company in the country.
It was formed when the government took over all private oil companies in Sri Lanka. CEYPETCO is based in Colombo and is managed by the Ministry of Petroleum Resources Development. It is one of the largest government-owned companies in Sri Lanka.
CEYPETCO provides a lot of money for the Sri Lankan government. About 30% of the government's budget depends on the money CEYPETCO gives them. However, in some years, CEYPETCO has also faced big financial losses.
Contents
History of CEYPETCO
How CEYPETCO Started
Even after Sri Lanka became independent in 1948, the way the country handled its oil and gas industry stayed the same for a long time. This changed in 1961. The Prime Minister at the time, Sirimavo Bandaranaike, introduced a new law.
This law allowed Sri Lanka to buy oil from countries like the UAE and the former Soviet Russia. This helped Sri Lanka get oil at better prices. After CEYPETCO was created, the government took over the British and Dutch oil companies that were working in Sri Lanka.
Growing the Business
In 1968, CEYPETCO built a new oil refinery. A refinery is a factory that turns crude oil into useful products like petrol and diesel. This new refinery helped the company make more oil products.
Later, in 1969, foreign oil companies were allowed to work in Sri Lanka. They could do this by partnering with the National Iranian Oil Company. The Sapugaskanda Refinery, which is the biggest oil refinery in Sri Lanka, was built by Iran with CEYPETCO's help. In the late 1980s, this refinery also started making JET A1 for airplanes.
In the mid-1970s, CEYPETCO began selling LPG cylinders for homes. They started in Colombo and then expanded their delivery all over the country.
CEYPETCO's Role in the Market
CEYPETCO handles more than half of all the oil products sold in Sri Lanka. It also manages 60% of the country's oil refining. CEYPETCO owns and operates refineries that can process a lot of oil every day.
Since the 1970s, CEYPETCO was the main company for oil in Sri Lanka. This allowed it to do many things. It imported crude oil and refined oil, stored it, distributed it, and sold it in shops. CEYPETCO also added many other products to its sales, such as chemicals for farming, chemical fertilizers, LPG, and materials for making synthetic fibers.
The company also supplied bitumen for building roads. Selling lubricating oil and fuel for ships also became very profitable for CEYPETCO in the late 1970s.
Changes in the Market
Between 1977 and 1994, the government in Sri Lanka started to change its economic policies. They began to allow more private companies to operate. This meant that private companies could start selling lubricants, synthetic fibers, and fuel for ships.
Later, private companies were also allowed to import and distribute LPG. In 1996, a company called Royal Dutch Shell bought a part of CEYPETCO's LPG business. However, ten years later, the government bought back most of that business.
In 1978, CEYPETCO also started making Nylon 6 yarn. This yarn is used for textiles, tires, and fishing nets. In 1979, the refinery's capacity was increased even more, allowing it to process more crude oil.
Challenges and New Competitors
On October 20, 1995, there was an attack on CEYPETCO's oil storage facilities. This caused the destruction of oil tanks and a lot of oil was lost.
In 2003, the government decided to allow another company to enter the oil market. This was done to create more competition. So, the Lanka Indian Oil Company (LIOC) was set up. It was allowed to import and sell important oil products like diesel, petrol, and bitumen.
CEYPETCO has also been providing oil to power plants for many years. These power plants use oil to generate electricity. The demand for electricity has grown, so more oil is needed for power generation.
Recently, during the Sri Lankan energy crisis, the government decided to allow more companies to sell fuel in Sri Lanka. Before this, CEYPETCO and Lanka Indian Oil Company were the main sellers. Now, three new companies, United Petroleum, Sinopec, and RM Parks (working with Shell), have been allowed to enter the market.
CEYPETCO's Finances
CEYPETCO's financial performance has changed over the years. The company's income and profits can go up and down.
| Year | Revenue
(mil. LKR) |
Net income
(mil. LKR) |
Total assets
(mil. LKR) |
Employees |
|---|---|---|---|---|
| 2005 | 161,851 | 7,710 | 69,106 | 2,866 |
| 2006 | 196,766 | −1,721 | 74,233 | 2,930 |
| 2007 | 238,364 | 2,862 | 97,873 | 2,931 |
| 2008 | 341,670 | −14,952 | 120,631 | 2,832 |
| 2009 | 237,662 | −11,566 | 147,144 | 2,792 |
| 2010 | 256,329 | −26,922 | 153,223 | 2,744 |
| 2011 | 356,442 | −94,508 | 187,127 | 2,610 |
| 2012 | 512,910 | −97,308 | 206,231 | 2,658 |
| 2013 | 518,152 | −7,984 | 187,035 | 2,657 |
| 2014 | 558,324 | 1,741 | 182,550 | 2,668 |
| 2015 | 376,734 | −21,735 | 199,107 | 2,579 |
| 2016 | 423,061 | 53,027 | 190,989 | 2,577 |
| 2017 | 446,502 | 1,469 | 218,701 | 2,573 |
| 2018 | 520,967 | −105,050 | 329,271 | 2,461 |
| 2019 | 630,859 | −11,856 | 326,340 | 2,366 |
Recent Financial Challenges
CEYPETCO has faced some financial difficulties recently. In April 2020, the company reported a significant loss in the first three months of the year. Its total debt also increased a lot.
The cost of importing oil for Sri Lanka has gone up. For example, in 2021, the country spent much more on oil imports compared to 2019. This high cost of imports puts a strain on the country's money.
Because of a shortage of dollars to buy crude oil, the Sri Lankan government had to temporarily shut down the Sapugaskanda oil refinery on November 14, 2021. This refinery is over 50 years old and produces different types of fuel like kerosene, jet fuel, petrol, and diesel.
To help with the fuel situation, the government received a loan from the Central Bank of Qatar. This money was used to buy fuel and increase the country's foreign money reserves.
