China's oil company signs fuel agreement with Sri Lanka

Chinese petroleum company Sinopec has signed an agreement with Sri Lanka that allows the company to operate in the country for the next 20 years to import, store, distribute, and sell petroleum products.

"Sinopec inked an agreement (in Colombo) with Sri Lanka today (Monday) to operate 150 fuel stations and construct 50 new stations," according to China's Embassy in the South Asian nation.

It will start operating in Sri Lanka within 45 days after obtaining the license.

Calling it a "historic move" to upgrade China-Sri Lanka strategic cooperation, the embassy said it will "ensure the island nation's steady and uninterrupted fuel supply as well as its energy security."

An official at Sri Lanka's Power and Energy Ministry, MPDUK Mapa Pathirana, said the agreement brings "hope" for a more "stable and reliable" fuel supply, and will help consumers by strengthening the country's energy sector.

The signing of the agreement came as the South Asian island country is going through its worst financial crisis in decades because of economic mismanagement and the impact of the COVID-19 pandemic.

According to the IMF, Sri Lanka's public debt was at 128% of its gross domestic product as of the end of last year, which is "unsustainable."

Early this year, Sri Lanka received the first $330 million tranche of the IMF's nearly $3 billion bailout meant to support the island country.