China's Sinopec Engineering is currently leading the race in the bid to build a major oil refinery in Bangladesh. The company, which is one of the leading contractors for the country's Belt and Road Initiative, announced this week that it is confident that it will be able to come out ahead in the bidding given its credentials and capabilities.
The company's president, Xiang Wenwu, told reports on Monday that they have made "concrete progress" on the refinery project in Bangladesh. Xiang explained that they are now entering final negotiations and the company has a very good chance of being hired to take on the project.
Local reports from India citing an unnamed senior official of Bangladesh Petroleum have revealed that the country is expected to tap Sinopec to build its $1.15 billion facility in the southeastern port of Chattogram. Sinopec, also known as China Petrochemical Corporation, is reportedly planning to partner with French firm Technip to build the facility.
The planned refining facility will be capable of processing up to 3 million tons of crude oil annually. This will essentially triple India's annual refining capacity to 4.5 million tons from its current capacity of 1.5 million tons. The facility is expected to generate annual savings of around $220 million. India currently imports around 7.5 million tons of crude and refined petroleum each year.
Apart from expressing his confidence in winning the bid, Xiang also stated that Sinopec is eyeing further expansion into other regions, specifically in South Asia, Africa, and Southeast Asia.
Sinopec will need to accelerate its overseas expansion to make up to its shortfalls in the previous years. In 2018, Sinopec's revenues fell to around 10 billion yuan, a sharp fall from its 14 billion yuan earnings in 2017. For the first six months of 2019, the world's largest oil refining, gas, and petrochemical conglomerate was only able to generate revenues of around 5.9 billion yuan, a 4.9 percent year-on-year drop.
Sinopec's signed overseas contracts for the first half of the year has dropped by around 32.9 percent year-on-year, with the deals it has signed estimated to be worth around 2.2 billion yuan. The decline in its revenues and acquired contracts has placed added pressure on the company to win more projects both domestically and internationally.
According to Xiang, the company is currently trying to win major projects in Egypt and North Africa. The executive did not elaborate on the details of the said projects, but he did mention that most of the projects are still in the early stages of development.
