Ceylon Petroleum Corp, the Sri Lankan state-owned oil company, failed in its appeal to have a London court ruling over turned.
The ruling last year ordered the company to pay $162 million plus interest for non-payment of dues to Standard Chartered Bank.
The company appealed against the ruling; however government officials announced on Friday that this had failed.
"It has been reported that the order is against us," the island nation's Attorney General Palitha Fernando told Reuters.
"First of all we have to see what the order was, then we are looking at (the) possibilities of appealing in the House of Lords."
Ceypetco refused to make hedging payments to five banks including Standard Chartered, Citigroup and Deutsche Bank, reported Reuters.
The company, which imported around 26 million barrels of crude oil, costing $2 billion in 2007, was required to hedge its purchases.
The price crash in 2008, which saw oil prices drop from $147 to $40 in five months made Ceypetco liable for hedging payments to the banks.
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