Connect with us

News

Sri Lankan Oil and Gas exploration grinds to a standstill amid protracted legal battle

Published

on

Sri Lanka’s efforts to attract and leverage international investment into exploration and commercialisation of two blocks adding to over 5,000 square kilometers with potential oil and gas resources in the Mannar Basin have once again been gridlocked by legal challenges in the Court of Appeal.

According to the latest developments in the CA (Writ) Application No: 392/2023, the court found that a prima facie case has been established by the Petitioner, Serendive Energy.

Accordingly the court issued orders restraining the 1st to 36th Respondents and/or its servants or agents from granting to any third party other than the Petitioner the rights to offshore exploration of blocks M1 and C1, until a final determination is reached in the case.

Serendive Energy, which has a strategic alliance partnership with a large Indian conglomerate commenced pursuit of legal remedies following a recent effort in 2023 to reverse exploration block award that had previously been made to the company.

Serendive Energy first participated in an open international tender (SL 2019-02) in 2019, and was awarded the blocks, Mannar Basin M1 and Cauvery Basin C1 in May 2021. This decision took place following evaluations conducted by the Petroleum Development Authority, and headed at the time by former Chairman Saliya

Wickramasuriya and Current Chairman Surath Ovitigama, who have long served among the nation’s leading domain experts on oil and gas.As stated in the 2021 Ministry of Power and Energy Annual Report “International competitive bids were called for in the year 2019 for the exploration and production of oil and gas of Mannar Block M1 and Cauvery Block C1 and the bid evaluation process had been concluded in May 2021.”

“Negotiations had been held by the government of Sri Lanka throughout the year 2021 with Serendive Energy (Pvt) Ltd for separate petroleum resources agreements in respect of M1 and C1 blocks, and about 90% of the negotiations have been concluded. The final petroleum resources agreement is expected to be entered into during the first half of the year 2022.”

While the awarding of blocks to Serendive Energy was hailed at the time as critical forward after many previous false starts, all activity on exploration ground to a halt during the country’s economic crisis and the ‘aragalaya’, following which attempts were subsequently made to reverse the award. The Petitioners submitted that such measures amount to a direct contravention of the 2003 Petroleum Act.

The effort to attract international players to invest in Sri Lanka’s Oil and Gas exploration industry which ground to a halt in 1984 with the civil war recommenced in 2003 with the opening up of tenders for exploration to international local and global investors via the Petroleum Resources Act, No.26 of 2003.

Hydrocarbon prospectivity and legislation in Sri Lanka was established in 2001 with the funding by the Asian Development Bank (ADB) and technical assistance from New South Global, a part of the School of Petroleum Engineering within the University of New South Wales (UNSW) based in Sydney, Australia

The team leader of this project, Prof. Ray Shaw concluded in the report that “The Gulf of Mannar basin represents a new deepwater frontier region which has the indicia for hosting significant hydrocarbon accumulations.”

This report and conclusion based on the 2001 TGS Norpec Seismic survey encouraged a further more detailed survey by TGS and a Gravity/Magnetic study which confirmed the finding of this ADB/University of New South Wales Project.

The Petroleum Act 2003 was passed by parliament under the leadership of the then Prime Minister Hon. Ranil Wickremesinghe. However, subsequent mismanagement and bureaucratic inaction hindered any meaningful progress from being achieved.

With exploration and development requiring around 10 years, the window to leverage the country’s natural resource if fast disappearing with global “Net Zero” targets approaching in 2045-50 since the production period offered by the government is 20 years. Hence, all future investors will not have the full 20 years before global demand drops off significantly, making investment in Sri Lanka less attractive.

With the chances of success in this industry being as low as seven to 10%, international investors were already extremely hesitant, while Sri Lanka’s history of nationalization of such industries has proved to be a further deterrent. This included previous instances arbitrary, and often overnight policy changes towards nationalization and expropriation such as with TGS Norpec Seismic survey 2001 and 2005 as well as Caltex, Shell and Esso in the early 1960’s.

With the uncertainty created by two upcoming elections in the next 12 months and the country’s exploration process stuck in legal proceeding, and given the time required post-general election to call for EOI/RFP, shortlist, negotiate, select and conclude various administrative processes, it is unlikely that Sri Lanka to commence a new exploration process for at least two years with new investors for other blocks.

Moreover, Sri Lanka’s oil and gas bid is also still recovering from developments which took place in 2013 when a large regional National Oil Company first announced its intention to bid on multiple blocks, intimidating other interested investors in participating in the tender, only to ultimately refrain from bidding, and subsequently make a global announcement claiming that there was no oil and gas “prospectivity: in the Mannar basin – contradicting many independence assessments and geophysical surveys.

The combination of these factors led to negligible investor interest over the past 10 years, evinced by the lack of progress in that time. The latest injunctions on the largest blocks currently opened for exploration may prove to be the final nail in the coffin.



Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

News

New Chancellor appointed to General Sir John Kotelawala Defence University

Published

on

By

President Anura Kumara Dissanayake has appointed Air Chief Marshal Kolitha A. Gunathilake (Retd.) as the new Chancellor of General Sir John Kotelawala Defence University.

The letter of appointment was presented to Air Chief Marshal Kolitha A. Gunathilake (Retd.) by Secretary to the President Dr Nandika Sanath Kumanayake at the Presidential Secretariat on Monday (05) afternoon.

Air Chief Marshal Kolitha A. Gunathilake(Retd.) has served as Commander of the Sri Lanka Air Force and as Chief of Defence Staff.

(PMD)

Continue Reading

News

Govt. urged to halt ‘illegal’ presidential pardons

Published

on

Ven. Gnanasara Thera reacts as prison officers escort him out of the Court of Appeal, which yesterday (05) ordered the sixyear prison sentence imposed on him in 2018 to take effect.

By Shamindra Ferdinando

The government is coming under pressure from civil society organisations to formulate a clear ‘mechanism’ to deal with requests for presidential pardons.

Representing civil society organisations, Gamini Viyangoda yesterday flayed the NPP government for the delay in taking action against Ven. Galagoda Aththe Gnanasara Thera, after the Supreme Court declared the 2019 presidential pardon granted to him by President Maithripala Sirisena null and void. He said successive Presidents had abused their executive power to release convicted persons from prison.

Purawesi Balaya activist Viyangoda pointed out that the Supreme Court ruled that President Sirisena had acted arbitrarily and failed to independently consider the relevant materials before exercising his executive power.

The Court of Appeal, in August 2018, sentenced Gnanasara Thera, General Secretary of the Bodu Bala Sena (BBS), to six years rigorous imprisonment for contempt of court over his conduct during proceedings concerning missing journalist Prageeth Ekneligoda. Viyangoda said that those who had been affected by the monk’s conduct have the right to know on what basis the President released him, in May 2019.

The Court of Appeal yesterday (05) ordered the relevant authorities to enforce the remaining period of imprisonment imposed on the Thera.

Gnanasara Thera, who had been subject to an open warrant for his arrest, was produced before the Court of Appeal, today, by prison officials.

Having considered the submissions made before it, the Court of Appeal directed the Commissioner General of Prisons to take the necessary steps to enforce the remaining period of the sentence imposed on Gnanasara Thera. Police on Saturday (03) apprehended the monk at a forest monastery in Kalutara. The Colombo Magistrate’s Court on Sunday (04) ordered the Thera to be remanded in custody till Monday.

Appearing for Gnanasara Thera, Attorney-at-Law Iresh Seneviratne, together with Attorney-at-Law Pasan Karunaratne, told the court yesterday that his client had been experiencing severe mental distress and had therefore gone to an ‘Aranya Senasanaya’, where he had been staying.

Viyangoda said that examination of presidential pardons, executed over the years, would reveal how successive leaders exploited the executive power to appease their own. Responding to The Island queries, Viyangoda said that Sirisena, in Sept. 2019, just two months before the presidential election, granted Jude Shramantha Jayamaha a Presidential pardon.

Jude Shramantha Jayamaha was sentenced to 12 years by the High Court, but the Court of Appeal revised that sentence to death, in July 2012, which the Supreme Court later upheld. Viyangoda said that though the Supreme Court, in June 2024, declared that the particular Presidential action was illegal and arbitrary, law enoforcement authorities were yet to take tangible measures to enforce the court directive.

Viyangoda stressed that no President should exercise the right to pardon a convicted on his or her own without following laid out procedures. According to him, Sirisena appeared to have simply ordered the monk, and the convicted murderer, released in response to appeals received by him. A comprehensive investigation could identify those who had been involved in these wrongdoings.

Continue Reading

News

GL urges cautious handling of Saudi death row case, blasts govt. over BRICS affair

Published

on

Prof. Peiris

Convenor of Janathawadi Joint Opposition, Prof. G. L. Peiris, yesterday (05) emphasised the responsibility on the part of the government and others to act cautiously when making representations in respect of Sivarasa Anojan facing death sentence in Saudi Arabia over a controversial social media post.

Addressing the media at former President Ranil Wickremesinghe’s Flower Road Office, Prof. Peiris emphasised that whatever representations should be made through the Foreign Ministry.

The one-time External Affairs Minister warned of dire consequences of political party leaders, members of Parliament and civil society making direct representations and trying to get in touch with various Saudi authorities over the phone.

Prof. Peiris said that those who intervened on behalf of Anojan should keep in mind that Sri Lanka should be mindful of the Saudi way of governance and sensitivities.

The former Minister questioned the circumstances Sri Lanka was left out of the recent BRICS summit held in New Delhi. He recalled how former President Wickremesinghe discussed Sri Lanka’s entry into BRICS with Russian President Putin and received an invitation for the Summit there but as a result of the change of government, in Sept. 2024, Sri Lanka ignored that invitation.

That resulted in Sri Lanka being left out from the New Delhi summit, Prof. Peris said.

Prof. Peiris pointed out the absurdity in sending the Foreign Secretary to the BRICS Summit in Russia instead of the President, PM or the Foreign Minister to represent the country.

Referring to the forthcoming conclusion of the current IMF programme, initiated during Wickremesinghe’s time, Prof. Peiris said that Sri Lanka lost a great opportunity to benefit from BRICS by failing to represent the country at a higher level at the Russian summit.

The BRICS nations established the New Development Bank (NDB), originally called the BRICS Development Bank, Prof. Peiris said.

Dismissing NPP government’s explanation regarding Iranian ships awaiting necessary supplies but deprived by US imposed restrictions, the former Minister strongly criticised the administration’s response. According to him, this government responded in a similar manner when the US sank an unarmed Iranian frigate just outside Sri Lankan territorial waters in March this year.

Prof. Peiris declared that the government’s assertion that the US restrictions weren’t only directed at Sri Lanka but all Iranian vessels in other regions as well was not acceptable (SF)

Continue Reading

Trending