China seeks to tighten grip on Brunei’s oil business after Venezuela setback
A Chinese petrochemical giant will more than double the size of its oil refinery in Brunei, as China boosts its economic sway in the former British protectorate
BANDAR SERI BEGAWAN, Brunei (MNTV) – A Chinese petrochemical giant will more than double the size of its oil refinery in Brunei, as China boosts its economic sway in the former British protectorate, reports The Telegraph.
Hengyi Petrochemical Company said it would expand the capacity of its refinery to 20 million tonnes by 2028, up from eight million tonnes now. The move will be partly bankrolled by loans and tax breaks from the Brunei government.
The move comes as Donald Trump’s ousting of Venezuelan dictator Nicolás Maduro potentially opens a new era of big powers asserting dominance in their own regions.
Brunei’s closest relationship has traditionally been with Britain. The tiny but wealthy petrostate, which sits on the edge of the Malaysian-Indonesian archipelago in the South China Sea, was under British protection for almost a century until gaining independence in 1984.
The U.K. was for decades the largest foreign investor in Brunei, until it was overtaken by Hong Kong last year.
The country also hosts a British military base, manned by the Royal Gurkha Rifles, which is used to train soldiers for jungle warfare.
China has become an increasingly significant player, as it looks to become the preponderant economic and geopolitical power in its Southeast Asian backyard.
Brunei has signed up to Beijing’s $1.3tn (£962bn) belt and road initiative (BRI), a global infrastructure financing program that serves China’s geopolitical interests.
The Hengyi joint venture, which unites Chinese private conglomerate Zhejiang Hengyi and Brunei’s state-owned Damai Holdings, is part of the BRI.
Other projects include a $1.2 billion bridge and a port. These, along with a highway upgrade, were mostly built by Chinese-controlled construction firms.
The Sultan of Brunei – one of the world’s wealthiest rulers, with a fortune estimated at more than $20 billion – visited Beijing last year.
Xi Jinping, the Chinese president, who seldom travels, passed through Brunei in 2019.
Hengyi first mooted the expansion of its refinery in 2020. The venture exports refined oil products, such as diesel and petrol.
It also serves Hengyi’s petrochemical plant, which makes materials for plastic production including paraxylene and polypropylene.
In a statement, Hengyi said the expansion would boost the company’s exports, integrate its supply chain, secure the supply of raw materials, and cut costs.
“This project fully utilizes overseas strategic oil resources to create new business growth points for the company,” the statement said.
China’s energy security was dealt a blow from the U.S. president’s Venezuelan intervention, which reduced Beijing’s certainty of crude-oil supplies from the Latin American country.
Brunei will welcome confirmation of the investment, after its economy fell into a trough last year.
Have Your Say!
Have you been affected by the issues raised in this story? Please share your experiences by emailing haveyoursay@soundvision.com.
Please include a contact number if you are willing to speak to a Muslim Network TV’s representative. You can also get in touch in the following ways:
Tweet: @MuslimNetworkTV
We must take charge of our narrative. Research indicates that 92% of their Muslim coverage is negative. Help us change that.
