US funds Sri Lanka oil exploration

US funds Sri Lanka oil exploration
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First Published: Wed, Mar 14 2007. 07 21 PM IST
Updated: Wed, Mar 14 2007. 07 21 PM IST
Colombo: Sri Lanka, which imports all its oil, received a grant of Rs2.55 crore($465,265) from the US to help the south Asian island seek offshore exploration bids from oil and gas companies.
The grant, which does not have to be repaid, will help the Ministry of Petroleum and Petroleum Resources Development formulate a “production-oriented” regulatory structure, the US Embassy in Colombo said in an e-mailed statement.
“Development of the offshore oil and gas sector could be an important opportunity for Sri Lanka to reduce energy imports, generate revenue and create jobs,” the statement cited US Ambassador Robert Blake as saying. “A well-developed regulatory structure is essential to attracting and keeping high-quality investors in the oil sector.”
Sri Lanka plans to auction offshore licenses to oil explorers to help meet demand for fuel that is growing by about 8% a year. The nation’s petroleum purchases account for about 20% of imports in the $26 billion economy.
Sri Lanka is offering China one of eight blocks in the Mannar basin off the island’s western coast before calling for bids from oil and gas companies. The government is in talks with China National Offshore Oil Corp, China’s largest offshore oil company, Sri Lanka’s petroleum minister A.H.M. Fowzie said in a 1 March interview in Shanghai.
The basin contains the equivalent of one billion barrels of oil, Fowzie said.
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First Published: Wed, Mar 14 2007. 07 21 PM IST
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