KELUM BANDARA   Courtesy Daily Mirror

• Says companies operating in Sri Lanka are against Sinopec entering the market
• Sri Lanka signed MoU with Sinopec for US $ 3.7 billion refinery in Hambantota
• If a Chinese oil company comes here, they have higher technologies. So the local companies will face severe competition

Colombo, May 16 (Daily Mirror) – Sinopec, the leading Chinese petroleum company that has sought to invest in Sri Lanka, is facing obstacles in pressing ahead with implementation, a leading Chinese scholar who is presently in Sri Lanka told Daily Mirror yesterday.

In an interview with Senior Fellow and Director of Centre for South Asian Studies at the Shanghai Institutes for International Studies, Prof. Liu Zongyi said that companies currently operating locally had gotten in the way of Sinopec, fearing competition.

He is a scholar with his research focus on Indian economy and foreign policy, China’s foreign policy, South Asia issues, the Belt and Road Initiative and global governance. He is in Sri Lanka at the moment at the invitation of Pathfinder Foundation.

For example, Chinese oil company Sinopec. They would like to build a refinery here. Now, we are facing obstacles because local companies don’t want Chinese oil companies to come here. It is a problem of competition. If a Chinese oil company comes here, they have higher technologies. So the local companies will face severe competition. They don’t want to accept such pressure because now the market is theirs,” he said.

Responding to a query about allegations of unviability of Chinese investments, he said, In the past, China invested a lot in Sri Lanka and built a lot of infrastructure projects such as the Hambantota Port. It’s a mega infrastructure project. It needs time to become effective. It cannot fall into effect in just one or two years. But the local people think why the Chinese want to invest so much and why they want to put in so much money here while the Chinese cannot create jobs for the locals. Now you can find that the Hambantota Port has created profits for the local people,” he said.

During the visit of President Anura Kumara Dissanayake to Beijing early this year, a MoU (Memorandum of Understanding) was signed with Chinese state-owned oil and gas giant China Petrochemical Corporation which is commonly known as Sinopec for US $ 3.7 billion oil refinery in Hambantota.

Sri Lanka’s Ministry of Energy and Sinopec signed the agreement for US $3.7 billion investment to construct an oil refinery with a capacity of 200,000 barrels in the Hambantota region, according to the PMD. Sinopec Energy Lanka, a subsidiary of Sinopec, is currently involved in fuel distribution in Sri Lanka.

Sinopec and Sri Lanka will have to work to resolve land, tax and water issues. Sinopec’s refinery in Sri Lanka places it in direct competition with India’s interests in expanding its role as an energy supplier.

During the visit of Indian Prime Minister Narendra Modi recently, a MoU was signed among Sri Lanka, India and the United Arab Emirates (UAE) to establish a multi-product petroleum pipeline as part of India-Sri Lanka connectivity.