Finance Minister states intent to lease oil reserve to foreign companies before operations commence

Finance Minister Moosa Zameer stated today that portions of the proposed national strategic fuel reserve, intended to increase the Maldives' storage capacity, could potentially be leased to foreign companies.

Speaking at a press conference held at the President's Office, the Minister stated that work on the National Fuel Storage project, announced by President Dr. Mohamed Muizzu, is currently progressing at a rapid pace.

Regarding the project, Minister Zameer stated that several potential locations for fuel storage have already been identified. He noted that the lagoons of two islands near Male' are currently being surveyed, emphasizing that the chosen site must be easily accessible to large vessels in all weather conditions. The Minister further added that surveying work for these locations is expected to commence within the coming week.

We have already identified several potential locations. As you are aware, establishing these storage facilities requires selecting sites that ensure easy accessibility and safe vessel berthing across various weather conditions. We are specifically looking for areas that can accommodate the alongside mooring of very large vessels. Our current plan is to execute this project in three phases. The first phase will focus on the Male' region. STO is currently surveying lagoon areas near two specific islands. God willing, the necessary technical surveys are scheduled to commence as early as next week.

Minister of Finance Moosa Zameer

The Minister stated that work is currently underway to finalize designs and conduct the feasibility studies required to secure financing. The government aims to present the project’s comprehensive plan, feasibility report, and financing options to the President within the next two weeks.

Addressing public concerns regarding the expansion of the nation's fuel reserves, the Minister noted that the experience of the past decade has demonstrated that current storage capacities are insufficient to meet the country's needs. In response to questions raised by some regarding the necessity of maintaining a one-year fuel supply, the Minister explained that any surplus beyond the Maldives' domestic requirements could be leased out to third parties.

Minister Zameer further noted that numerous international companies are interested in establishing oil storage and trading operations within the Indian Ocean region. He stated that securing agreements with major oil firms would alleviate pressure on the Maldives' cash flow. The Minister described this initiative as a vital economic endeavor, currently being spearheaded through a joint effort between the State Trading Organization (STO) and the Ministry of Finance.

For instance, some have questioned the necessity of maintaining a one-year fuel reserve here. One simple answer is that we could, for example, maintain a six-month supply for our own needs and lease out the remaining storage capacity. We are aware that many oil companies are interested in maintaining strategic stocks within the Indian Ocean region. Therefore, through agreements with major oil distribution firms or national oil companies from the Middle East, we could facilitate the storage of large reserves. This would allow us to arrange flexible procurement options, such as purchasing the quantities we require on a four-month credit cycle or as our cash flow permits. There are numerous such strategic options available to us.

Minister of Finance Moosa Zameer

Establishing a national strategic fuel reserve within the next five years is a key pledge of President Dr. Muizzu. The government believes this project will ensure national energy security and mitigate the economic impact of volatility in the global oil market.