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| Thursday, 1 July 2004 |
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Lanka to re-explore for oil and gas by Rohan Mathes Sri Lanka will re-explore for oil and gas in the coastal sea-belt off the Gulf of Mannar and the Cavoury basin in the North. The Power and Energy Minister Susil Premajayantha yesterday said at a press conference at his Ministry office that Sri Lanka is desperate for oil and gas to replenish the growing demand for fuel in the wake of a consistent hike in oil prices in the international market, which is shifting in the range of between US$ 30 and US$ 40 per barrel. "Hydropower generation in the country is insufficient to meet the growing energy demands of the country. We must devise alternative sources of energy. Research has revealed there could be oil and gas resources yet untapped in certain areas of the coastal sea-bed of Sri Lanka", he said. The Director General of the Petroleum Resources Development Committee (PRDC) Titus Jayawardena in his presentation disclosed that there is a growing demand for petroleum products at an annual rate of 8 per cent, to make oil imports 10 per cent of the total costs of imports to the country, and the oil bill around US$750 million. The Director General said that there has been rapid advancement in the technology of oil/gas exploration in the modern times, and we could take the Indian success story of oil exploration, just about 15 kilo metres away from the Northern coast of Sri Lanka, as a source of inspiration in this crucial endeavour, despite the abandonment of previous attempts to strike oil in the late 70's and early 80's. He said that the new oil and gas exploration project envisaged would obtain technical assistance from the Asian Development Bank and the "Satellite Gravity" surveys would be done by Petroscan of Sweden. The Norwegian Geophysical Company would initially cover about 1000km. "The cost per single well would be around US$10 to 15 million and if the quest for oil was unsuccessful, we lose this total amount invested", he said. Titus Jayawardena further said, "the PRDC would function within the legal framework of Sri Lanka under the Petroleum Resources Act No. 26 of 2003. We would formulate a 'National Policy' on the management of the petroleum resources of the country in the future. There would also be a separate ministry portfolio for 'Petroleum Resources Development'. The PRDC should have the minimal of 'red tape' and should not be another government department". He pointed out that major oil exploration companies are steadfastly engaged in enhancing production and therefore they are not interested in exploring new frontiers as in Sri Lanka. The Geological promise in Sri Lanka is high, but lacks human resources. Therefore, the government has to share the risk with the contractor. "We have received an encouraging response from the international oil companies. Hopefully, approximately 4000km would be given out for exploration after December, and they would resume drilling in 2006", he noted. The Director General added, "the legislation is in place, the management structure developed. It is competitive, simple and has flexible fiscal terms. It also has favourable commercial terms with promising prospectivity". |
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