By Sandun A Jayasekera
The Energy Ministry will establish a new company in a Public Private Partnership (PPP) to exploit petroleum and gas in the Mannar basin, Energy Minister Udaya Gammanpila said.
The new company, ‘The National Oil and Natural Gas Company of Sri Lanka’ (NONGCSL), a subsidiary of the Ceylon Petroleum Corporation (CPC) will be entrusted with the construction of pipelines, storage transportation, distribution, infrastructure facilities, development, ownership and monitoring the oil and gas in Sri Lanka.
The new company will also be tasked with the responsibility of exploration and exploitation of other local petroleum resources and natural gas with commercial capabilities, he added.
The only way out for Sri Lanka from the massive foreign debt of US$447 billion and to plug the draining of US$350 million a month to import petroleum products was to exploit the fossil fuel resources found in the Mannar basin sooner than later, Minister Gammanpila said.
“It has been proved that fossil fuel and natural gas fields are available within Sri Lanka according to the research performed in the land area of M2 of the Mannar bed within the period 2001 – 2003. Our main task now is to exploit the petroleum and gas resources for a sustainable and speedier progress of our nation as soon as possible,” Minister Gammanpila who is also the government spokesman stressed.
Manufacturing of fossil fuel, petroleum and natural gas will offset the d
ependency on imported petroleum products which is a huge burden to the national economy. It will also create opportunities to become an exporter of natural gas in future and earn foreign exchange in addition to providing employment to thousands of Sri Lanka youth, he said. The national policy on Sri Lanka’s oil and natural gas has declared that the government would take action to establish a National Natural Gas Company under a public private partnership to exploit the fossil fuel resources for commercial purpose.
The NONGCSL will be established under the Companies Act No. 7 of 2007 and on terms of the Petroleum Resources Act No. 21 of 2021 enabling local and foreign entrepreneurs to invest in the new company.
The total exploitable capacity of fossil deposits at the Baracuda depth 2 in Mannar basin is estimated to be at 20 billion barrels of crude oil and the current value of it is around US$ 150 billion. In addition, there is 9 trillion cubic feet of gas valued at US$17 billion, Minister Gammanpila noted.
- The new company, ‘The National Oil and Natural Gas Company of Sri Lanka’ (NONGCSL), a subsidiary of the Ceylon Petroleum Corporation (CPC)