Features

Hambantota oil refinery – From fairy tale to reality?

Published

12 months ago

2025/01/24

Thilina Walpola

President Dissanayake meeting his Chinese counterpart Xi Jinping recently in Beijing

by Gomi Senadhira

“It is easier to fool people than convince them they have been fooled”– Mark Twain

The signing of US $3.7 billion deal to construct a “state-of-the-art oil refinery” oil refinery, with a capacity of 200,000 barrels, in Hambantota with Chinese state-run oil giant Sinopec during President Anura Kumara Dissanayake (AKD)’s state visit to China, is indeed an important achievement. This is significant because successive governments had tried but failed to attract such a large investment into petroleum refining in Sri Lanka. However, it is appropriate to ask will it become a reality or is it another false promise, a fairy tale? After all, we have been fooled before with “fairy tales” about an oil refinery in Hambantota. Hence, we need to be cautious. Particularly because the most recent attempt to build an oil refinery began as a badly-choreographed farce and ended as a tragedy.

To understand why I am saying so, let’s start with the most recent attempt to build an oil refinery in Hambantota.

Largest Investment under the SLSFTA

In July 2018 the former Minister of Development Strategies and International Trade Malik Samarawickrama announced, during the Parliamentary Debate on the Sri Lanka-Singapore Free Trade Agreement (SLSFTA) that “…. Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products…. In principle approval has already been granted by the BOI and the investors are awaiting the release of land and environmental approvals to commence the project.”

US $3.85 billion investment by Singapore’s Silver Park International

Eight months after the statement by Minister Samarawickrama in the parliament, on 19^th March 2019, Deputy Minister Nalin Bandara and technical advisor to the Ministry, Mangala Yapa, announced at a press conference that the construction of US $3.85 billion oil refinery in the Mirijjawila Export Processing Zone in Hambantota will begin shortly by a Singapore-based Silver Park International (Pte) Ltd with Oman’s Oil and Gas Ministry. The project was a joint venture between Silver Park International, with 70 percent stake in the company, and the Ministry of Oil and Gas of Sultanate of Oman, with 30 percent shares. The investment was billed as Sri Lanka’s largest Foreign Direct Investment (FDI), ever. The oil refinery with the capacity to refine 200,000 barrels of crude oil per day, was expected to generate additional US $7 billion of exports per annum when it becomes fully operational in 2023, by exporting a minimum of 9 million metric tons of petroleum products per year.

Within twenty-four hours of the announcement by the Sri Lankan government on the joint venture, officials of Oman’s Oil and Gas Ministry denied being part of a $3.85 billion plan to build an oil refinery in Sri Lanka. According to a report filed by Reuters, addressing a news conference in Muscat, Salim al-Aufi, undersecretary of Oman’s Ministry of Oil and Gas, stated “No one on this side of the panel is aware of this investment in Sri Lanka …. It came as news to me; I don’t know who is signing the cheque for $3.8 billion.” In addition to that, Sri Lankan and Indian media started to question the credentials of the Singaporean investor.

Despite the Omani government’s denial and the media exposure of questionable credentials of the Singaporean Investor, Sri Lanka’s Board of Investments (BOI) decided to go ahead with the “project for a joint venture of Singapore company and Oman.” And on March 24, 2019, the foundation stone for the petroleum refinery was ceremoniously laid by the Prime Minister Ranil Wickremesinghe at the Mirijjawila Export Processing Zone with the attendance of Omani Minister of Oil and Gas Mohammed bin Hamad Al Rumhy, a number of ministers including Sajith Premadasa and several local parliamentarians.

US $20 billion investment by Singaporean company Sugih Energy International

After that, in October 2019, Sri Lankan newspapers as well as international news websites reported, quoting minister Malik Samarawickrama and Finance Minister Mangala Samaraweera that “The Sri Lankan government has given its approval to the Singaporean company Sugih Energy International (SEI) to build a $20 billion refinery at the port (of Hambantota). The project’s value exceeds the total of all foreign direct investment in Sri Lanka over the past forty year.” Mr. Samarawickrama also stated “”The company will invest in two phases. In the first phase, they have committed an investment of $14.8 billion for the refinery, and further $4 to $5 billion for petrochemical and other projects.”

Fairy Tales to Sell the FTA

Unfortunately, or fortunately, none of these multibillion-dollar investments from Singapore due to the FTA ever saw the light of day. These and almost all other investments from Singapore “thanks to this FTA,” turned out to be “fairy tales” narrated by the government of Prime Minister Ranil Wickremesinghe to sell the Sri Lanka-Singapore FTA, to the parliament and the people of Sri Lanka. Though the “Silver Park” refinery was to become fully operational by 2023, it didn’t even progress beyond the foundation stone by then. The project by “Sugih Energy International Pte Ltd” couldn’t even reach that milestone. In August 2023 the Cabinet of Ministers approved two proposals presented by President Ranil Wickremesinghe in his capacity as the Minister of Investment Promotion to cancel the agreements with these two “Singapore based investors,” Silver Park International and “Sugih Energy International Pte Ltd”, due to their failure in implementing the projects!

BOI’s Failure to exercise Due diligence on these “largest Foreign Direct Investments”

It is difficult to understand as to why the BOI failed so miserably, to exercise DUE DILIGENCE on these “largest Foreign Direct Investments” in Sri Lanka. Due diligence on an investor by BOI is essential to understand the potential risks of the investment and to make informed decisions about whether to allow an investment in or not. More importantly, it is necessary to comply with Anti-Money Laundering regulations and to prevent financial crime. At the very least, the BOI should have ascertained if the investor is a Politically Exposed Person (PEP) and what the sources of the investor’s funds were? If the BOI had undertaken even a cursory appraisal of these two companies, like a simple google search, they would have discovered enough red flags on these two investors.

However, it is necessary to state that it is difficult to find much information on Sugih Energy International through a simple google search. Only news reports on this company are on its “US $20 billion investment in an Oil refinery in Hambantota.” Then there is a reference to a company, based on data from Panama Papers, named Sugih Energy International registered in the British Virgin Islands (which is well-known for its offshore companies) with links to Singapore, in the “Offshore Leaks Database,”. There is also a reference to a Sugih Energy International in the Singapore Business Directory. However, this company had changed its name to AETURNUM ENERGY INTERNATIONAL PTE. LTD. On 10 August 2024. On the same day it had changed its Entity Status from “Live Company” to “In Liquidation – Compulsory Winding Up (Insolvency).”

In contrast, it is possible to get a substantial amount of information on Silver Park International (Pte) Ltd through a simple google search. For example; the registered address of Silver Park International (Pte) Ltd, which is 18, Roberts Lane, #03-01 Singapore, shows the building in Singapore’s Little India where this company is located. #03-01 could be a room number within that building. More interestingly, it reveals the names of nearly a hundred other companies which have 18, Roberts Lane, #03-01 Singapore (218297), as their registered address. This includes an entity specialising in setting up shell companies. Can a shell company located at a shared address, invest US$3.85 billion in Sri Lanka? A cursory appraisal would have also revealed that most of the directors of Silver Park International (Pte) Ltd were Politically Exposed Persons (PEPs) and information on the investigations carried out by India’s Enforcement Directorate on these individuals.

Investigation by India’ s Enforcement Directorate (ED)

Though Sri Lankan authorities failed to carry out due diligence, after an explosive report by ‘The Hindu’ newspaper on ‘single largest foreign investment’ in Sri Lanka by a Singapore based investment company with links to an Indian politician’s family, the authorities across the Palk Strait started to investigate the Indian directors of Silver Park International (Pte) Ltd, namely, Mr S.Jagathrakshakan, a DMK Member of Indian Parliament and former union minister of state for information and Broadcasting, and his family members for their involvement money laundering activities. This was reported widely in the Indian media. And according to these reports in August 2024, Mr. Jagathrakshakan and his family members were fined ₹908 crore ( Sri Lankan Rupees 31 billion) for violation of India’s Foreign Exchange Management Act (FEMA) and the charges were related to “….an investment of ₹42 crore in a shell company, Silver Park International Pte Ltd, incorporated in Singapore in 2017, and an investment of ₹9 crore (Sri Lankan Rupees 308million) in a Sri Lankan company.”

US$ 4.5 billion Oil Refinery by Sinopec

Though the government scrapped these controversial agreements with Silver Park International and “Sugih Energy International Pte Ltd” in August 2023, these agreements with controversial shell companies seriously damaged Sri Lanka’s image as an investment destination. Law-abiding countries do not permit investments, particularly such large investments, without doing a reasonable appraisal of the investors and the sources of the investor’s funds.

After scrapping the agreements with the controversial shell companies in November 2023, the Cabinet of Ministers approved awarding a contract to China Petroleum and Chemical Corporation (SINOPEC) to build a petroleum refinery in Hambantota. It was also announced that the refinery is expected to attract an investment of at least $4.5 billion. However, since then no tangible progress has been reported on this project.

US$ 3.7 billion oil refinery by Sinopec

Now, we have the MOU signed between Sri Lanka’s Ministry of Power and Energy and China’s Sinopec Corporation to build US$ 3.7 billion oil refinery, capable of producing 200,000 barrels of oil per day. Though this was signed during President Anura Kumara Dissanayake’s four-day state visit to China, given the history of this project it is still appropriate to ask will it become a reality this time around or will it be another false promise, a fairy tale?

Conclusion

Given the high-profile manner in which this MOU was signed we can be optimistic about the success of the project. After all, Sinopec is one of the biggest petroleum companies in the world and with a revenue of $429.7billion in 2023, is the fifth on Fortune Global 500 list. We cannot even think about comparing it with shell companies like Silver Park International or Sugih Energy International.

Finally, however, there is one unanswered question about the amount of the investment. The cost of this project appears to have substantially reduced since it was first mooted in November 2023; from US$4.5 billion to US$3.7 billion. Will the Ministry of Power and Energy explain the reasons for this change?

(The writer, a former public servant and a diplomat, can be reached at )

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Features

Maduro abduction marks dangerous aggravation of ‘world disorder’

Published

17 hours ago

2026/01/8

Sahan Weerasooriya

Venezuelan President Maduro being taken to a court in New York

The abduction of Venezuelan President Nicolas Maduro by US special forces on January 3rd and his coercive conveying to the US to stand trial over a number of allegations leveled against him by the Trump administration marks a dangerous degeneration of prevailing ‘world disorder’. While some cardinal principles in International Law have been blatantly violated by the US in the course of the operation the fallout for the world from the exceptionally sensational VVIP abduction could be grave.

Although controversial US military interventions the world over are not ‘news’ any longer, the abduction and hustling away of a head of government, seen as an enemy of the US, to stand trial on the latter soil amounts to a heavy-handed and arrogant rejection of the foundational principles of international law and order. It would seem, for instance, that the concept of national sovereignty is no longer applicable to the way in which the world’s foremost powers relate to the rest of the international community. Might is indeed right for the likes of the US and the Trump administration in particular is adamant in driving this point home to the world.

Chief spokesmen for the Trump administration have been at pains to point out that the abduction is not at variance with national security related provisions of the US Constitution. These provisions apparently bestow on the US President wide powers to protect US security and stability through courses of action that are seen as essential to further these ends but the fact is that International Law has been brazenly violated in the process in the Venezuelan case.

To be sure, this is not the first occasion on which a head of government has been abducted by US special forces in post-World War Two times and made to stand trial in the US, since such a development occurred in Panama in 1989, but the consequences for the world could be doubly grave as a result of such actions, considering the mounting ‘disorder’ confronting the world community.

Those sections opposed to the Maduro abduction in the US would do well to from now on seek ways of reconciling national security-related provisions in the US Constitution with the country’s wider international commitment to uphold international peace and law and order. No ambiguities could be permitted on this score.

While the arbitrary military action undertaken by the US to further its narrow interests at whatever cost calls for criticism, it would be only fair to point out that the US is not the only big power which has thus dangerously eroded the authority of International Law in recent times. Russia, for example, did just that when it violated the sovereignty of Ukraine by invading it two or more years ago on some nebulous, unconvincing grounds. Consequently, the Ukraine crisis too poses a grave threat to international peace.

It is relevant to mention in this connection that authoritarian rulers who hope to rule their countries in perpetuity as it were, usually end up, sooner rather than later, being a blight on their people. This is on account of the fact that they prove a major obstacle to the implementation of the democratic process which alone holds out the promise of the progressive empowerment of the people, whereas authoritarian rulers prefer to rule with an iron fist with a fixation about self-empowerment.

Nevertheless, regime-change, wherever it may occur, is a matter for the public concerned. In a functional democracy, it is the people, and the people only, who ‘make or break’ governments. From this viewpoint, Russia and Venezuela are most lacking. But externally induced, militarily mediated change is a gross abnormality in the world of democracy, which deserves decrying.

By way of damage control, the US could take the initiative to ensure that the democratic process, read as the full empowerment of ordinary people, takes hold in Venezuela. In this manner the US could help in stemming some of the destructive fallout from its abduction operation. Any attempts by the US to take possession of the national wealth of Venezuela at this juncture are bound to earn for it the condemnation of democratic opinion the world over.

Likewise, the US needs to exert all its influence to ensure that the rights of ordinary Ukrainians are protected. It will need to ensure this while exploring ways of stopping further incursions into Ukrainian territory by Russia’s invading forces. It will need to do this in collaboration with the EU which is putting its best foot forward to end the Ukraine blood-letting.

Meanwhile, the repercussions that the Maduro abduction could have on the global South would need to be watched with some concern by the international community. Here too the EU could prove a positive influence since it is doubtful whether the UN would be enabled by the big powers to carry out the responsibilities that devolve on it with the required effectiveness.

What needs to be specifically watched is the ‘copycat effect’ that could manifest among those less democratically inclined Southern rulers who would be inspired by the Trump administration to take the law into their hands, so to speak, and act with callous disregard for the sovereign rights of their smaller and more vulnerable neighbours.

Democratic opinion the world over would need to think of systems of checks and balances that could contain such power abuse by Southern autocratic rulers in particular. The UN and democracy-supportive organizations, such as the EU, could prove suitable partners in these efforts.

All in all it is international lawlessness that needs managing effectively from now on. If President Trump carries out his threat to over-run other countries as well in the manner in which he ran rough-shod over Venezuela, there is unlikely to remain even a semblance of international order, considering that anarchy would be receiving a strong fillip from the US, ‘The World’s Mightiest Democracy’.

What is also of note is that identity politics in particularly the South would be unprecedentedly energized. The narrative that ‘the Great Satan’ is running amok would win considerable validity among the theocracies of the Middle East and set the stage for a resurgence of religious fanaticism and invigorated armed resistance to the US. The Trump administration needs to stop in its tracks and weigh the pros and cons of its current foreign policy initiatives.

Features

Pure Christmas magic and joy at British School

Published

17 hours ago

2026/01/8

Sahan Weerasooriya

Students of The British High School in Colombo in action at the fashion show

The British School in Colombo (BSC) hosted its Annual Christmas Carnival 2025, ‘Gingerbread Wonderland’, which was a huge success, with the students themseles in the spotlight, managing stalls and volunteering.

The event, organised by the Parent-Teacher Association (PTA), featured a variety of activities, including: Games and rides for all ages, Food stalls offering delicious treats, Drinks and refreshments, Trade booths showcasing local products, and Live music and entertainment.

The carnival was held at the school premises, providing a fun and festive atmosphere for students, parents, and the community to enjoy.

The halls of the BSC were filled with pure Christmas magic and joy with the students and the staff putting on a tremendous display.

Among the highlights was the dazzling fashion show with the students doing the needful, and they were very impressive.

The students themselves were eagerly looking forward to displaying their modelling technique and, I’m told, they enjoyed the moment they had to step on the ramp.

The event supported communities affected by the recent floods, with surplus proceeds going to flood-relief efforts.

Features

Glowing younger looking skin

Published

17 hours ago

2026/01/8

Sahan Weerasooriya

Hi! This week I’m giving you some beauty tips so that you could look forward to enjoying 2026 with a glowing younger looking skin.

Face wash for natural beauty

* Avocado:

Take the pulp, make a paste of it and apply on your face. Leave it on for five minutes and then wash it with normal water.

* Cucumber:

Just rub some cucumber slices on your face for 02-03 minutes to cleanse the oil naturally. Wash off with plain water.

* Buttermilk:

Apply all over your face and leave it to dry, then wash it with normal water (works for mixed to oily skin).

Face scrub for natural beauty

Take 01-02 strawberries, 02 pieces of kiwis or 02 cubes of watermelons. Mash any single fruit and apply on your face. Then massage or scrub it slowly for at least 3-5 minutes in circular motions. Then wash it thoroughly with normal or cold water. You can make use of different fruits during different seasons, and see what suits you best! Follow with a natural face mask.

Face Masks

* Papaya and Honey:

Take two pieces of papaya (peeled) and mash them to make a paste. Apply evenly on your face and leave it for 30 minutes and then wash it with cold water.

Papaya is just not a fruit but one of the best natural remedies for good health and glowing younger looking skin. It also helps in reducing pimples and scars. You can also add honey (optional) to the mixture which helps massage and makes your skin glow.

* Banana:

Put a few slices of banana, 01 teaspoon of honey (optional), in a bowl, and mash them nicely. Apply on your face, and massage it gently all over the face for at least 05 minutes. Then wash it off with normal water. For an instant glow on your face, this facemask is a great idea to try!

* Carrot:

Make a paste using 01 carrot (steamed) by mixing it with milk or honey and apply on your face and neck evenly. Let it dry for 15-20 minutes and then wash it with cold water. Carrots work really well for your skin as they have many vitamins and minerals, which give instant shine and younger-looking skin.