Sri Lankan legislators clear the way for oil exploration 

[July 10, 2003 - 9.00 GMT] 

Sri Lanka Wednesday approved a new petroleum act that will pave the way for oil exploration in the island’s northern seas.

The Parliament approved the Petroleum Resources Bill that will allow private investors to share profits with foreign and local companies. Under the provisions of the Bill the state retains absolute ownership of all petroleum resources and terrain in which resources are found.

“The petroleum resources bill…will provide a comprehensive legal framework for oil and gas exploration and development in the country”, Energy Minister Karu Jayasuriya told Parliament yesterday.

Presenting the Bill he explained that private investment was an internationally accepted practice. He further said it was a necessity because it was ‘impossible’ for a small economy like Sri Lanka’s to invest in a capital-intensive industry with ‘extraordinary’ risk like oil exploration.

Once data is collected the government is expected to present it to foreign oil companies towards the end of the year after which they will be invited to bid for oil blocks in the Cauvery Basin and the Gulf of Mannar Basin.

However Minster Jayasuriya pledged the government would not betray the country and multinational companies would not be allowed to take away all of the profits from oil exploration, “because it is a national resource belonging to the people”, he said.

Foreign investment in oil exploration though would depend on whether the government and the LTTE move closer towards finding peaceful solution to the 20-year ethnic conflict.

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Last Updated Date: July 10, 2003  - 9.00 GMT.