Two leading US companies in oil and gas exploration – Exxon Mobil and Lambert Oil and the world’s third biggest producer of petroleum products -Total Oil of France - have expressed willingness to invest in Sri Lanka for oil and gas exploration and the French Company has already signed an agreement worth US$ 25 million for a project, Petroleum Resources Development Minister Chandima Weerakkody said yesterday.
Minister Weerakkody addressing the weekly SLFP news briefing said the Total Oil has started selecting sub contractors from among local companies to start exploration in the eastern Sri Lanka.
“We were able to have several meetings with a number of US oil exploration giants at a global oil and gas exploration meeting held recently in the US and these two companies expressed interests to invest in Sri Lanka for oil exploration.
“The Petroleum Resources Development Ministry continues to interact with the two companies and a fact finding delegations from the two companies are expected in Sri Lanka shortly,” Minister Weerakkody said.
Responding to a journalist on the proposed Price Formula for fuel, Minister Weerakkody said the Finance Ministry was studying the formula to come up with the most suitable way to implement it.
“Before, we activate the price formula for fuel we will have to look at the implications and protect the interests of the entire country. Do not forget that the Ceylon Petroleum Corporation (CPC) was in dire straits and is burdened with heavy debts before global oil prices were tumbled,” he said.
“The Total debt of the CPC stood at Rs. 365 billion by the end of 2014. The total monthly debt service stood at Rs. 1.3 billion that included loan repayment and interest.
“The government can bring down fuel prices by two or three rupees but it will benefit only the motorists and further aggravates the issue debt servicing.
“The entire country would be benefited if the Government brings down prices of several essential commodities including fuel and electricity prices, when the CPC is in a better financial position, with no more financial burdens,” Minister Weerakkody said.
He blamed Mahinda Rajapaksa regime for privatising the lubricant business and added a new State owned company would be set up to produce lubricants at a cost of US$ 13 million in the next few weeks.
The Cabinet approval for the project was received on last Wednesday.
Commenting on the fuel import business, Minister Weerakkody said there would no monopoly in oil imports under this Government and all those who could import oil cheap and in a transparent manner would be given tenders and a Cabinet sub-committee would go through each and every oil import tender.
He said there were so many under-hand dealings during the time of last regime that took the CPC from a position of danger to disaster and the Cabinet was not aware of the controversial hedging deal that cost the CPC US$ 123 million to pay as compensation to a number of foreign banks.
However, Minister Weerakkody said the Government would pass the benefit of the collapse of global oil price at the most appropriate time that would benefit the economy and the public and added the day to receive good news would not be too far. (Sandun A Jayasekera)