Sri Lanka says Oman Oil still keen on refinery project (updated)

China Harmony Auto Holding

21/03/2019 13:43

(Adds quotes, changes dateline)
    By Shihar Aneez
    COLOMBO, March 21 (Reuters) - The Sri Lankan government said
on Thursday that Oman's government-controlled Oman Oil Co has
made clear that it is interested in taking a 30 percent stake in
a new oil refinery project on Sri Lanka's south coast. 
    The Oman oil ministry on Wednesday denied that it had agreed
to acquire the stake, saying it knew nothing about the
investment that was announced by Sri Lanka's government the
previous day. Sri Lankan officials had said that a Singapore
entity controlled by the Indian company, Accord Group, would
take a 70 percent stake.  urn:newsml:reuters.com:*:nL3N217360 
    Sri Lankan Prime Minister Ranil Wickremesinghe told
parliament on Thursday that the Oman government has sent a
letter saying it is interested in the $3.85 billion project,
which could become the island nation's biggest direct foreign
investment, and there have been discussions about a 30 percent
stake. He said that could rise to 40 percent.
    Earlier in the day Sri Lanka's investment board said that
Oman Oil Company had "registered their firm intention to
participate in equity up to 30 percent, subject to reaching
agreement between the parties".
    It is the second time in recent months that Sri Lankan
officials have announced a deal before it has been completed,
forcing them into hurried explanations.
    Finance Ministry officials failed to secure a $300 million
loan that they said was offered by Bank of China  601988.SS  and
was to be received before the end of January. Ministry officials
this week said that the loan is still being discussed.
    Any big deal in Sri Lanka involving Indian investment will
pose a challenge to China, which until recently had been on
track to be the dominant foreign investor on the island. 
    India has become concerned in recent years about China
muscling in to Sri Lanka and other countries in a region where
India is the traditional power. 
    The planned refinery will be built next to an investment
zone China Harbour Engineering Corp is planning and a $1.4
billion port controlled by China Merchants Port Holdings
 0144.HK .
    Chinese Foreign Ministry spokesman Geng Shuang told a
regular news conference in Beijing that he was not aware of the
refinery project but China has "an open attitude towards India
and others having mutually beneficial cooperation with Sri
Lanka".
    China is the biggest buyer of Omani oil, importing about 80
percent of the Middle Eastern nation's overall crude exports in
January, according to an Oman government website. 
    Sri Lanka's investment board also said that another Oman
entity, Oman Trading International, is willing to supply the
entire feedstock requirement for the project and take on the
marketing for its refined oil products, such as gasoline. 
    Wickremesinghe will launch part of the project, the building
of the oil storage tanks, on Sunday at a ceremony on his 70th
birthday. 
    That first phase of the project will cost an estimated $1.85
billion and be paid for by Accord. The construction and
operation of the refinery at an estimated cost of $2 billion
would be paid for by the Accord-Oman venture, investment board
officials have told Reuters.      
    

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Oman denies it has agreed to invest in Sri Lanka oil refinery
project     ID:nL3N217360 
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 (Writing by Martin Howell
Editing by Tom Hogue and David Goodman)
 ((Martin.howell@thomsonreuters.com; +91 11 49548102; Reuters
Messaging: martin.howell.thomsonreuters.com@reuters.net))