The lease on Sri Lanka's vital WWII oil tank farm with India has been extended for 50 years.

Energy Minister Udaya Gammanpila said here on Friday that Sri Lanka has agreed to sign a new arrangement with India to lease out the crucial World War II-era oil tank farm in the eastern port district of Trincomalee for 50 years.

The arrangement, according to Gammanpila, will be inked next week after Cabinet approval and is a continuation of a 2002 agreement with the Indian Oil Company's local operators, LIOC.

In 2002, Sri Lanka and India struck the first contract on the island's most critical oil storage complex, which served as a supply base during World War II.

The Trincomalee tank farm, which the British rulers erected to refuel Allied warships and aircraft, had always piqued India's interest.

"The LIOC will have the control of just 14 of the 99 tanks over a 50-year lease," Gammanpila said while speaking to reporters here.

He claimed that the joint venture business founded by the state oil entity, Ceylon Petroleum Corporation (CPC), and the LIOC would run 61 tanks out of a total of 99 tanks, with CPC maintaining a majority 51 percent interest.