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Sri Lankan officials say Oman minister has arrived for refinery project launch

COLOMBO (Reuters) - Oman's oil minister arrived in Sri Lanka on Saturday to participate in the launching of a $3.85 billion oil refinery project, government officials in Colombo said, three days after Oman said it had not yet agreed to invest in the facility.

The arrival of Mohammed bin Hamad Al Rumhy could mean that the project - Sri Lanka's biggest foreign direct investment deal - is back on track. However, there is no immediate sign of a formal deal involving Omani investment.

Sri Lankan officials said on Tuesday Oman's oil ministry planned to take a 30 percent stake in the project.

A Singapore company controlled by India's Accord Group would invest the other 70 percent. The storage tanks part of the facility would be owned fully by the Accord entity.

But on Wednesday, Oman denied knowing about its part in the plan to build the refinery on Sri Lanka's southern coast.

"He [Oman's oil minister] is here to take part in the ground breaking ceremony for the oil tanks of the refinery," a senior official at Sri Lanka's strategic development ministry told Reuters.

Officials from Oman's oil ministry were not immediately available for comment.

The refinery is being constructed near a $1.4 billion port at Hambantota that is controlled by China Merchants Port Holdings.

India and China have been vying for political influence in Sri Lanka in recent years, with investment a key part of the battleground.

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 Oman government data.

Another government official confirmed the minister's arrival and his participation at the ceremony in Hambantota on Sunday.

There are also plans in place by China Harbour Engineering Corp to build an investment zone alongside the port.


(Reporting by Shihar Aneez; Editing by Martin Howell and Clelia Oziel)