US grants Rs 51 mln for oil exploration in Lanka

Colombo, Mar 15: Openly showing its interests in the potential oil and gas deposits in the war-ravaged Sri Lanka, the US has awarded a grant of Rs 51 million (474,000 dollars) to the Sri Lankan government to ''promote the energy security'' in the island nation.

''The grant will fund technical assistance to the Ministry of Petroleum and Petroleum Resources Development in support of its efforts to develop a comprehensive oil and gas regulatory system and establish an organisational structure for the regulatory authority,'' a statement from the US Embassy said yesterday.

US Ambassador to Sri Lanka Robert Blake and Finance Ministry Secretary Dr P B Jayasundera signed the grant on behalf of the US and Sri Lankan governments, respectively at a ceremony at the Finance Ministry in Colombo yesterday.

''Development of the offshore oil and gas sector could be an important opportunity for Sri Lanka to reduce energy imports, generate revenue and create jobs. The United States wants to help Sri Lanka maximise its potential gain from oil and gas exploration,'' US Ambassador Blake said at the ceremony.

Sri Lanka presently has no oil or gas production of its own and imports approximately 80,000 barrels per day. Sri Lanka has already agreed to allow a couple of Indian and Chinese companies to explore oil and gas blocks in the island of Mannar.

The US grant is expected to help the Sri Lankan government's plans to open up promising and competitive offshore oil and gas blocks for exploration and development.

''A well-developed regulatory structure is essential to attracting and keeping high-quality investors in the oil sector,'' the US Ambassador said, expressing hopes that US grant assistance would help Sri Lanka to establish ''an open and transparent regulatory system that both protects Sri Lanka's interests and gives investors confidence''.

The US Trade and Development Agency funds various forms of technical assistance, early investment analysis, training, orientation visits and business workshops that support the development of a modern infrastructure and a fair and open trading environment in various countries, including Sri Lanka.

It was only last week that Sri Lanka and the United States entered into a 10-year agreement to provide reciprocal logistical support for their respective military forces.

The Acquisition and Cross-Servicing Agreement (ACSA) between the two countries came into effect from March 5 this year.

UNI