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Video: Govt. has to collect US$7 Bn from Cairn Energy: Champika

02 Jan 2015 - {{hitsCtrl.values.hits}}

The Maithripala Administration will carry out an investigation into the failure by the present regime to collect a sum of US$7 billion which was owed to Sri Lanka by Cairn Energy which breached the contract to extract oil from the Mannar Basin, JHU General Secretary Patali Champika Ranawaka said today.

He said the US$7 billion which was earned by Cairn Energy as a result of its share price hike after the announcement it made saying it had found Gas in Mananr Basin.

Mr. Ranawaka, a former Minister of Power and Energy, said the price of shares belonging to Cairn Energy would have benefited Sri Lanka but unfortunately oil prices had declined.

He said the company had paid more than US$1 billion to the Indian government in a similar situation that had occurred a business deal with India.
“This is a mega deal and we will bring those responsible for this massive loss when we come to power,” Mr. Ranawaka said.

Relating the story behind the oil and gas exploration, he said the international funding agencies paid attention to oil and gas exploration in 1990 and the project was initiated in 2000. He said Norwegian TGS OPEC was allowed to explore for oil in 2002 while in 2007 the Mannar Basin was divided into eight sections or fields based on seismic data.

He said the third field was given to Cairn Energy, which is a British company owned by a close associate of former British PM Tony Blair. In 2011, Cairn had announced that Gas was found there but Cairn closed a deal with Vedanta where 40 percent of the stake was closed and the promise to extract oil within two years he said was not honored.

Mr. Ranawaka said a litre of petrol Octane-92 could be sold at Rs.58.11 per litre, Petrol high Octane at Rs.73, diesel at Rs.69, Kerosene at Rs.69 and furnace oil at Rs.49 with the reduction of premium that can also be reduced with decrease in global oil prices. (Yohan Perera and Ajith Siriwardane)

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