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Sri Lanka is pressing ahead with the development of the China Bay oil storage facility, near Trincomalee. The Sri Lankan government wants to turn Trincomalee into a regional petroleum hub with the help of India.

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Some of the most sought after essential oils from Sri Lanka include cinnamon Leaf oil, clove oil, cinnamon bark oil, nutmeg oil, pepper oil, citronella oil, sesame oil and cardamom oil. Of the numerous essential oils produced in Sri Lanka, cinnamon oil takes precedence for its numerous benefits known to mankind since the beginning of time.

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Sri Lanka’s GDP is $80bn, less than one-tenth the total assets of China Merchants Group. Sri Lankan per capita GDP and literacy rate are both about double its subcontinental neighbours.

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As long as oil prices were rising, hedging was advantageous, but hedging proved to be extremely costly once oil prices began to crash in the last few months of 2008. In the end, Sri Lanka’s treasury was exposed to about US$464 million in claims from three foreign and two local banks.

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China just requested 15,000 acres of land in southern Sri Lanka for the creation of a special economic zone that will reputedly create one million jobs, according to

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Sri Lanka’s economy has been faltering due to the falling value of the rupee and the increase in oil prices. It owes billions of dollars to China. People want political stability rather than bitter infighting.

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COLOMBO, Sri Lanka—Sri Lanka was caught in a constitutional crisis on Sunday, split between two prime ministers as politicians clashed over the sudden surprise appointment of a controversial former president, Mahinda Rajapaksa, as premier.

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Demand for oil is projected to rise by 40% by 2030, but supply is already hampered by under-investments in new production sources and the increasing difficulty of reaching remaining reserves (International Energy Agency IEA (2009), World Energy Outlook 2009).

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