Enoc clarifies oil sale to Lanka firm

Emirates National Oil Company (Enoc) has a strong, positive and long-term working relationship with key partners in the oil sector in Sri Lanka and successfully delivered approximately 532,000 metric tonnes of crude oil and petroleum products to Ceylon Petroleum Corporation (CPC).

Enoc issued a statement on Saturday to clarify a report regarding the returned cargo of 40,000 tonnes of diesel supplied by the company because it did not meet agreed specifications.

“As an organisation committed to quality, we review any feedback regarding our supplies seriously. In this incident, Enoc reiterates that the gas oil cargo for CPC 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 CPC,” it said.

“A different independent inspector inspected the cargo at the discharge port of Colombo, who reported that one of the parameters was not as per contractual specifications. Due to the nature of petroleum products, inspection results taken at load port and discharge port may vary due to a number of reasons. We are currently investigating the reason for the variation of the test results, and a detailed report is awaited.”

“Following the inspector’s report and pending Enoc’s investigation, CPC requested Enoc 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, Enoc was informed that CPC no longer required the alternate cargo. Nonetheless, as Enoc’s service commitments to CPC, Enoc will continue to render all such support and assistance to CPC as may be required.”

“Significantly, CPC has not suffered any actual damages or losses as no cargo has been discharged, unlike reports by a section of the media,” the statement said. “In addition, we would like to clarify the facts in relation to a gasoline component cargo sold to CPC on FOB basis in 2011. Following a critically low stock position, CPC had requested Enoc to supply gasoline urgently. The company 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 specifications of Enoc’s available gasoline component stock were made known to and expressly set out in a FOB contract between Enoc and CPC. CPC agreed to purchase the gasoline component cargo in accordance with the specifications in the said contract and chartered its own vessel to transport the gasoline component cargo from Enoc’s terminal.

“Following inspection by an independent inspector mutually agreed by Enoc and CPC, a quality certificate was issued by the inspector and was provided to CPC prior to loading. The gasoline component cargo was subsequently loaded onto CPC’s vessel and Enoc’s contractual obligations to CPC under the said contact ended upon the completion of loading. Enoc subsequently received full payment for this cargo, on the payment due date, as per the contract.

“In view of concerns raised in relation to the quality of the gasoline component cargo, Enoc agreed to make a nominal monetary compensation to CPC as a matter of goodwill and in view of the on-going business relationship. The compensation was made on the reiterated basis that Enoc had at all times complied with contractual specifications and without admission of any liability,” the company said.

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