New regulations rev up oil and gas exploration; four EOIs to be processedView(s):
Long-overdue regulations promulgated for oil and gas exploration off Sri Lanka’s shores will allow the Petroleum Development Authority (PDA) to process four pending expressions of interest (EoIs) from international oil companies.
Power and Energy Minister Kanchana Wijesekera this month published regulations to facilitate the invitation of EoIs from investors for joint oil and gas exploration. The gazette also prescribes an annual licensing procedure with fees payable each year. Once a bid is won, the joint study proponent shall purchase all mandatory petroleum data relevant to the acreage assigned to it.
There are around 900 blocks in the Mannar and Cauvery Basins. Called “Explore Sri Lanka”, Sri Lanka’s open acreage programme was launched one year ago after PDA and industry partners presented technical papers at several international oil and gas conferences, said Saliya Wickramsuriya, the Authority’s Chairman.
“The recent gazetting of the joint study, data licensing, and other regulations required to support this programme mean that we can now begin processing the expressions of interest received over the past few months,” he said.
The new Petroleum Resources Act of 2021 defined the roles, responsibilities, powers and functions of the various actors in the sector, including the new regulator, and proposed a national offshore energy company.
“The regulations under the Act put in place the various processes, rights and obligations under the various licences we plan to issue, and clearly explain how to access and use our rapidly expanding data catalogue,” Mr. Wickramasuriya explained. “This new Act and regulations have been pending for many years, and are the final blocks required to build investor confidence in Sri Lanka’s management of our offshore energy resources.”
Once exploration starts, if a joint study partner finds commercial hydrocarbon within any part of the acreage, the partner shall request the PDA to start exclusive negotiations on a resource-sharing contract in respect of the specific area, the regulations state.
If a partner finds any other energy potential or mineral potential, it shall notify the PDA regarding such finding. The Authority will then inform the relevant regulatory entity of the same, allowing such entity to independently take a decision pertaining to such energy or mineral potential.
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