The Sri Lankan government is close to presenting a new petroleum law to parliament and completing a natural gas policy that would investors confidence to invest in exploration for hydrocarbon deposits, Minister of Petroleum Resources Development Chandima Weerakkody said. 

“The Petroleum Resources Development Act is almost ready and is to be tabled soon in  parliament,” he said. “We have also come to the final stage of our national policy on natural gas.

”This will enable Sri Lanka to give investors confidence about the protection of their investment,” Weerakkody told a forum organised by the National Chamber of Commerce of Sri Lanka.  

The island needs to attract foreign investors to explore for hydrocarbon deposits and produce oil and gas as it lacks the financial and technical resources to do so by itself, he said.

“To convince investors who come we must ensure their protection and be absolutely convincing financially because the investors will always think of their return,” Weerakkody told the NCCSL’s  ‘Meet the Minister’ forum.

Weerakkody said that although Cairn India had found deep water natural gas deposits in the Mannar Basin, Sri Lanka is yet to extract the resource.

Cairn pulled out after petroleum prices collapsed, making drilling in deep water not commercially viable.  

Weerakkdoy said that the oil industry was a high risk one with only around one in seven wells successful in yielding hydrocarbon. 

“So the government is not in a position to take such a huge gamble.”

But he said there were a range of opportunities for Sri Lankan businesses to take part in the oil industry and the government was committed to promoting private sector investment. 

The government was now gathering more data on off shore petroleum blocks before going on a road show to promote the island ahead of the next bid round, Weerakkody said. 

“Before we go for a bid round we have to have data. Hopefully before the year-end we’ll have a road show and then the next bid round.”

(ECONOMYNEXT)