Cabinet clears new Petroleum Resources Bill

„Will replace existing Petroleum Resources Act No. 26 of 2003 „Expected to facilitate oil exploration and production activities

The freshly drafted Petroleum Resources Bill that would open up new opportunities for Sri Lanka’s energy sector has received clearance from the Attorney General and the Cabinet of Ministers this week gave approval for the bill to be published in the government gazette.

Once that is done, the bill will be tabled in Parliament for approval.

The new Petroleum Resources Bill was drafted after the Cabinet approval for the same in January 2021.

While Petroleum Resources Act No. 26 of 2003 will be replaced by the new law, it will include provisions that are required to develop the petroleum and natural gas exploration and production industries in Sri Lanka.

Energy Minister Udaya Gammanpila last week said that the new piece of legislation, if enacted by Parliament, would facilitate the upstream activities of the local oil and gas industry.

Gammanpila also said the nation could overcome the issues relating to its foreign debt sustainability, if efforts were made to fully harness the potential of the recently identified offshore oil and gas resources.

According to the minister, oil and gas deposits currently valued at over US $ 240 billion have been identified off the seas belonging to Sri Lanka.

Sri Lanka recommenced oil and gas exploration in 2020, after a three-year break. To move forward the effort, the government reopened the ex-cairn M2 block in the Mannar Basin for development and commercialisation through a limited tender offer.

The decision to recommence oil and gas exploration was taken by the government to attract investors to the industry.