China opposes Indo-SL oil pact

The Chinese government has warned that it would slash military aid to Sri Lanka if Colombo does not call off the deal with India for oil exploration in the Mannar basin, ‘Lanka’ newspaper reports.

The Sri Lankan government signed an agreement with Cairn India Ltd. on July 07th to explore and produce hydrocarbon and natural gas in the Mannar Basin.

Earlier, China had lobbied to claim this right.

In 2007, Beijing's war assistance to Sri Lanka exceeded $ 37.6 million in value, while development to the island amounted to one billion dollars that is more than what was provided by Japan, Sri Lanka’s main donor.

In addition, the Chinese government is funding massive projects such as an arts gallery in Colombo, the coal power plant in Norochcholai and the international port in Hambantota.

'Lanka' says further that after understanding China’s aid to Sri Lanka were aimed at securing rights to explore oil in the Mannar basin, India intervened to thwart China’s plans.

India is against the continuous supply of arms by China and Pakistan and called for a peaceful resolution rather than a military one to eliminate terrorism in the north.

New Delhi also urged Colombo to hold the provincial council polls in the east soon after its liberation.

However, India won rights for oil explorations in Mannar on condition of supporting the stability of the Rajapaksa regime, it is having its concern for survival after leftist parties have abandoned the coalition government.

China has reportedly taken up the matter with New Delhi at diplomatic level, the newspaper added.