STO to Expand Oil Storage by Dredging Maagiri Lagoon within 18 Months

The State Trading Organization (STO) plans to dredge Maagiri lagoon near Thilafushi island within the next 18 months, revealed Managing Director Shimad Ibrahim in an exclusive interview with Mihaaru last week.

According to Shimad, there is a pressing need for additional storage space for oil, which constitutes a significant portion of the company’s revenue. 

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“Expanding our storage capacity is vital for sustaining our business operations. This initiative will not only address our immediate storage needs but also result in significant cost efficiencies,” Shimad stated.

He pointed out the limitations imposed by the existing storage facilities in Funadhoo island, situated near Male’ City, as the primary driver behind the decision to reclaim Maagiri lagoon.

Notably, space constraints on Fonadhoo island have hindered access for larger vessels.

“Funadhoo can’t accommodate vessels carrying large volumes of oil, such as those with capacities ranging from 50,000 to 80,000 tons,” explained Shimad.

The government’s broader strategy is to relocate oil storage from Fonadhoo to Maagiri and transform Fonadhoo into a financial hub, said Ibrahim.

At present, Fonadhoo hosts around 50,000 tonnes of diesel and 10,000 tonnes of petrol; a considerable portion is earmarked for electricity generation.

STO’s oil sales in 2022 generated revenues totalling MVR 13.4 billion. However, Ibrahim noted that while oil remains a major revenue driver, profit margins are modest as the oil is primarily used to generate electricity.