Sinopec, a leading Chinese petroleum company, is encountering obstacles in implementing its investment plans in Sri Lanka, according to a top Chinese scholar.
Prof. Liu Zongyi, Senior Fellow and Director at the Shanghai Institutes for International Studies, told the Daily Mirror that local petroleum companies are resisting Sinopec’s entry due to concerns over increased competition.
He said Sinopec’s advanced technology poses a challenge to existing players who currently dominate the local market and are reluctant to face competitive pressure.
Prof. Liu, who is in Sri Lanka on an invitation from the Pathfinder Foundation, emphasized that Sinopec’s proposed oil refinery project is facing delays, despite the signing of a US$3.7 billion MoU earlier this year during President Anura Kumara Dissanayake’s visit to Beijing.
He acknowledged criticism about the viability of Chinese investments, but said mega infrastructure projects like Hambantota Port require time to deliver long-term benefits, which are now becoming evident.
The new refinery, with a proposed capacity of 200,000 barrels per day, is to be constructed in Hambantota, but pending issues such as land, tax, and water supply must be resolved.
Sinopec’s operations in Sri Lanka would directly compete with India’s regional energy interests, especially after India, Sri Lanka, and the UAE signed an MoU to build a multi-product petroleum pipeline during Indian PM Narendra Modi’s recent visit.
