Sri Lanka inks deal to buy Vietnamese oil

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Sri Lanka on Friday signed agreements with Vietnam to buy oil and share oil and gas expertise, just after it announced the discovery of natural gas offshore in the Mannar Basin.

Those two agreements were among eight signed after a two-day visit by Vietnamese President Truong Tan Sang, along with a business delegation, to explore the expansion of commercial and diplomatic ties.

"We have signed two agreements, and one is to purchase oil from Vietnam's state oil firm by the Ceylon Petroleum Corporation," External Affairs Secretary Karunatilaka Amunugama told Reuters.

The other related to technical cooperation on oil and gas exploration, he said. He gave no details on the terms.

Six other memorandums of agreement, including one relating to defense cooperation, were also signed, he said.

Sri Lanka produces no oil and is dependent on imports, which cost it US$3 billion in 2010, but this month had a promising natural gas find that may reinvigorate exploration interest in the country.

On Oct. 2, driller Cairn India Ltd. said it had found a natural gas deposit in the offshore Mannar Basin, but said more drilling was needed to see if it was commercially recoverable.

Sri Lanka also wants Vietnam's expertise to boost foreign direct investment, after the end of a quarter-century war that had long hampered the growth of the Indian Ocean island nation's $50 billion economy.

"We are ready to share any experience in the national development of Sri Lanka," Sang told an audience of Sri Lankan business owners in the capital, Colombo.

Sang said there was potential for increased cooperation in the textile, oil and gas, telecommunications, banking, infrastructure, security and education.

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