Sri Lanka’s Minister of Energy Udaya Gammanpila said that the USD267 billion worth of oil and gas resources in the Mannar Basin could generate three times the total debt of the country.
According to Gammanpila, although investors who invest in these oil and gas drills are given 50%, USD 133.5 billions is Government owned and it is almost three times the total debt value of the country which is a total of USD 47 billion.
The Minister made this observation while briefing the Committee including Hon. Parliamentarians on the Petroleum Resources Bill to be tabled in Parliament for the second reading. Accordingly, the Bill was approved by the Committee.
Gammanpila further stated that this Bill, which seeks to regulate and manage the exploration of petroleum resources, including the establishment of the Petroleum Development Authority of Sri Lanka, will be presented to Parliament as a matter of priority for the Government.
Gammanpila said that the Norochcholai power plant could operate for 120 years only from the gas in the Mannar Basin and the Sapugaskanda oil refinery could operate for 143 years with the oil alone.
Although neighboring country India has been extracting oil and gas from the seas close to Sri Lanka since the 1940s, Sri Lanka has missed it due to various reasons, according to Gammanpila. After lengthy discussions with experts on the subject, it was identified that there were several reasons have contributed for the aforesaid, the further Minister said. The Minister said large companies around the world have not come to explore oil resources in Sri Lanka in the recent past due to various reasons.
“We took steps to hand over this task to experts on the subject matter through the establishment of the Petroleum Development Authority given the lack of understanding on the scope of subject the officials who were to take decisions on this regard previously had. Also, as the regulatory powers such as the issuance of licenses were completely concentrated in the hands of the Minister, all activities had been disrupted when there was a change of the Minister. Therefore, we have decided to transfer all the powers of the Minister to the Board of Directors of this Authority. Also, a modern map was prepared to replace the existing traditional map for oil and gas exploration” the Minister added.
The Bill will also introduce a strong legal framework to protect these large investments and appoint a special committee to advise the minister, as billions of dollars will have to be invested in the industry, the Minister of Energy said.
Furthermore, in general, a country would succeed in one when drilling seven wells in search for oil and gas according to world standards. The Norwegian government had to dig 31 wells for one success story whilst 3 out of 4 wells drilled in Sri Lanka were successful the Minister said.
He also stated that he intends to seek the assistance of Sri Lankan experts in the field from around the world in this regard.
Committee Members Hon. State Minister Jayantha Samaraweera, Hon. Members of Parliament Chandima Weerakkody, Nalin Bandara, Muditha Prishanthi, Gunathilaka Rajapaksha, B.Y.G Ratnasekera and the Secretary to the Mrs. KDR Olga, Secretary to the Ministry were present at the meeting.