Why China's SINOPEC is Interested in Export-Oriented Oil Refinery in Sri Lanka?
04.17.2023 By TankTerminals.com - NEWS

April 17, 2023 [ANI] – SINOPEC, China’s largest oil and petrochemical products supplier and the second largest oil and gas producer is interested in the export-oriented oil refinery in Sri Lanka, but the question remains why?


According to the Sri Lankan publication, Mawrata News, the friendly relationship between the two countries has been used for China’s journey to become a world power at the risk of the lives of the people of this country.

The Sri Lankan government implemented huge projects like Hambantota Port, Mattala International Airport, Norochchole Coal Plant, and Colombo Nelum Tower by taking excessive loans. But only the Norochchole power plant was a useful project. By giving loans for huge projects, China trapped Sri Lanka in a debt trap.

Moreover, the current government once again announced a new big project that China is ready to start in Hambantota. The news is that a massive oil refinery aimed at export will be built in Hambantota with Chinese investment. This massive Chinese project is currently undergoing preliminary work, reported Mawrata News.

This news sparked a lot of debate in the country over the last few days, with many parties debating the transparency of such a project. That is, the question was whether the Sri Lankan and Chinese governments were credible in carrying out this work.

On February 24, 2023, the Ministry of Power and Energy decided to implement this project on the basis of ‘Built, Own and Operate’. The government planned to install an export-oriented petroleum refinery and related product processing centre in the Hambantota area.

The Sri Lankan government called for tenders to find suitable investors for the project. 5 foreign countries and one Sri Lankan company submitted their bids for this purpose – China Petroleum and Chemical Corporation (SINOPEC) in China. This is known as ‘Sinopec’ in Sinhalese; Vitol Group of Singapore Pvt; Malaysia Petrichor Capital Sdn Pvt; Grant and Shearer Company of Nigeria; Matin Tejarat Co. of Iran. Ltd Company and Dandeniya Engineering and Trading Company of Sri Lanka, reported Mawrata News.

Out of these companies, except for two foreign companies, all the other 04 companies were declared not eligible for the tender. In other words, it was revealed that China’s ‘SINOPEC’ is in first place among these tenders.
Although a final decision has not yet been taken to award this tender to China, it is said that China will be the lucky one, reported Mawrata News.

China’s SINOPEC and Singapore’s Vitol Group have been recognized as two qualified companies to own the above project. However, the government parties of Sri Lanka have declared that China’s SINOPEC is the most qualified and thus suitable.
The Sri Lankan consultant related to this company had recently given a statement to foreign media without revealing his identity.

There he said that for this project, the Sri Lankan government will give his company a large land of 1.6 square kilometres near the Hambantota International Port. Also, this project will produce 100,000 (one lakh) barrels of petroleum per day, reported Mawrata News.

Although Sri Lanka used to obtain loans from international lending organizations and countries at interest rates of 1 per cent or less, for the first time the Hambantota port project was implemented by obtaining loans at interest rates exceeding 6 per cent.

Taking such loans at high-interest rates is because Chinese companies give excessive commissions to certain parties to complete such transactions and by giving loans for huge projects, China traps Sri Lanka in a debt trap, reported Mawrata News.

China’s aim was to turn Sri Lanka into another battlefield in its efforts to become a world power. China has once again taken the fortune to plunder Sri Lankan resources, reported Mawrata News.

China-Sri Lanka friendship entered a sad path in the last 20 years. That is, with the start of the ‘One Belt One Road’ international project based on the need to strengthen China’s foreign policy and economic strategy, the friendly relations between the two countries became a bitter reality.

China has worked to damage Sri Lanka’s friendly relations with India, Japan, South Korea, America, England, Australia and other European countries, which have been supporting this country for a long time.

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