Lanka to explore petroleum, gas deals with Petronas - Minister Susil Premjayanth

Ravi Ladduwahetty

Sri Lanka will have the opportunity to deal with global petroleum and gas giant Petronas following Petroleum and Petroleum Resources Development Minister Susil Premajayanth meeting the top management of the multinational corporate in the Malaysian capital of Kuala Lumpur last week.

The Minister has met the top management of Petronas on the sidelines of the Oil and Gas Asia 2011 biannual conference which is sponsored by Petronas, which was held at the Kuala Lumpur Convention Centre from June 1 to 3. There were 1337 participating companies from 49 countries. There were also 21,787 trade visitors from 57 countries.

All were global oil majors such as Exxon - Mobil, Shell, Tootal and others.

“The door has now opened for Sri Lanka to negotiate petroleum and natural gas deals with Petronas and more deals in gas could now arise from my meeting with the senior management of Petronas,” the Minister told Daily News Business yesterday.

The theme of the conference was how to depend on natural gas as a source of energy by 2030 in the light of the rising global prices of petroleum vis a vis the relatively stable prices of natural gas which has prevailed, Minister Premajayanth said.

Addressing the 16th Oil and Gas Asia 2011 Parley conference at the Kuala Lumpur Convention Centre, Petronas Chief Executive Shamsul Azhar Abbas said that global oil prices are too high and should fall back to between $ 75 and $ 80 a barrel.

While demand has surged, there was no real evidence of an oil shortage and that current prices above $ 100 a barrel appeared largely linked to speculation in crude markets.

“Given the current state of market fundamentals and the cost environment, I believe prices should remain within the range of $ 75 to $ 80 per barrel,” Shamsul told the two-day Asian oil and gas conference.

Oil prices soared from about $ 70 a barrel last summer to as high as $ 115 this spring, and currently are hovering above $ 100. They were driven up by turmoil in the Middle East and North Africa, the rising demand in developing countries and a weakening US Dollar.

The 12-member Organization of Petroleum Exporting Countries, which accounts for about 40 percent of the global crude supply, will discuss Wednesday whether to boost production to help lower prices.

Shamsul said a major long-term challenge would be to meet growing oil demand amid dwindling resources, and that companies would be relying on smaller fields and offshore fields to sustain production.

Meanwhile, Asia’s oil demand has been projected to increase by two-thirds within the next 20 years, he said.