Signs of good fortune for Sri Lanka:

Surveys indicate quality hydrocarbon deposits off mannar

THE preliminary findings of a seismic survey conducted recently in the Gulf of Mannar, west of Sri Lanka, has revealed the presence of a world class petroleum system offshore, Minister of Finance, Industries and Investment Promotions, Dr Sarath Amunugama said.

Speaking at the Joint Annual Discussions of the World Bank and International Monetary Fund last week in Washington DC he said that this indicates a potential for high quality hydrocarbon deposits.

This prospect is expected to be further defined by additional 2D seismic surveys in December. International licensing is scheduled for the first quarter in 2006. "There are signs of good fortune for Sri Lanka," he said.

A major cause of concern is the high and rising price of oil in international markets. We stress the importance of all players in the petroleum sector, i.e. producers, suppliers and consumers, working together to maintain oil prices at a reasonable level.

"The Fund too has an important role to play in this regard. We urge that an oil facility to assist low-income countries affected by the surge in prices be operationalised soon. This could be in the form of a modification of the CFF," the Minister said.

"Despite the impact of the tsunami, we expect our economy to grow by over 5.5 per cent in 2005, with agriculture, industry and services all registering robust growth. Our export sector has been performing well despite challenges associated with the end of the Multi Fibre Agreement.

"Tourism is recovering from the effects of the tsunami. The surge in oil prices has become a major drawback because we are heavily dependent on imports for our energy needs. This is affecting the pace of economic growth, inflation and the balance of payments.

We stress, the importance of activating a medium-term financing arrangement to assist low income countries severely affected by the recent sharp rise in oil prices so that open and liberal trade and exchange systems in these countries can be sustained."

"The International Monetary Fund and the World Bank both have important roles to play in strengthening and sustaining the world economy.

The efforts being made by these institutions to assist low-income countries to reach the Millennium Development Goals are extremely important. The Fund's Medium Term Strategy, with its focus on addressing the challenges of globalisation, is very welcome."

Sri Lanka has graduated from being a low-income country, to the lower end of middle income status and have now reached a per capita income of US$ 1,040.

Government is committed to prudent macro economic policies promoting economic growth that would be pro-poor and will deliver equitable growth.

"We are taking measures to ensure that the disadvantaged segments of our population would benefit from this growth. The private and public sectors are working together to speed up economic prosperity in our country.

Our current focus is on the development of infrastructure facilities, particularly in key areas such as Power, Roads and Transport systems, Ports and developing of institutions catering to the needs of the rural and SMI sectors."

"We are making efforts to achieve the Millennium Development Goals in areas where we need to make further progress, even though Sri Lanka has a good record in human development.

Over the years, my country has achieved considerable success in human development. Our Human Development Indicators bear witness to these achievements. " Dr. Amunugama said.