The oil and gas sector has the potential to serve as a significant economic driver, augmenting the ongoing growth in agriculture and tourism, said Saliya Wickramasuriya, Chairman, Petroleum Corporation, Chair of the Board at Petroleum Development Authority of Sri Lanka and Commission member – Colombo Port City Economic Commission at an event hosted by the National Chamber of Commerce. “It stands as a potential game-changer for the country,” he said.
He also disclosed that from February this year, the Petroleum Development Authority (PDA) has become self-funded, no longer relying on the general treasury for funding via revenue generated from selling Sri Lankan petroleum data to the international oil and gas community.
This data, which we obtained at no cost, has proved to be valuable, with potential earnings of around US$ 20 to 30 million. “In 2021 alone, we managed to generate US$ 10 million from these data sales. This success is also indicative of the interest of market players in the data we possess, which signifies the potential of Sri Lanka’s oil and gas reserves.”
In the sector, there are entities with the title to the asset, the oil owners, and operators with equity. “Additionally, there are service companies that work for a fixed price, taking market risks. Many operators have shifted from internal data acquisition to outsourcing to service companies, which sometimes have spare capacity they aim to utilize profitably.”
Several companies have shown interest in Sri Lanka, requesting to acquire data at their expense for subsequent licensing and selling. This suggests a promising market demand for the data. It’s worth noting that Sri Lanka retains the promise not to compete with these companies in selling the data.
“Currently, we offer offshore acreage through short-term contracts, allowing companies to conduct petroleum exploration activities. This arrangement provides them with the opportunity to either build pipelines for future production or sell acquired data on a multi-plan basis. To enhance this process, we have divided our 20 old blocks into approximately 900 new, smaller blocks. This program has gained traction in the Middle East. We are set to formally launch the program next month or so, following its official launch at the end of 2021 and we anticipate witnessing the tangible results of this effort within the next 12 to 36 months, envisioning a landscape with several offshore operations in Sri Lanka involving diverse countries, companies of various sizes, and both service providers and operators.”
Shifting focus to the Port City project, it represents a timely opportunity for Sri Lanka, especially in the context of the current economic challenges and debt crisis.
Jonathan Frank