Govt. Rejects Oman’s Request for Exploration Block in Lieu of Interest on $ 3.6 Billion Loan
Co-spokesperson for the Cabinet and Minister of Plantations Industries Dr. Ramesh Pathirana
The government said yesterday it had rejected a request by the Sultanate of Oman to grant an oil exploration block in the Mannar Basin instead of interest payments on the $ 3.6 billion credit facility granted to Sri Lanka.
The Council of Ministers at its Tuesday meeting accepted this position and the government said it had reached an agreement with Oman accordingly.
“In the Cabinet decision, there was no agreement regarding the request for an exploration block. It is only the loan agreement that we have reached for 3.6 billion dollars to be repaid after one year for the purchase of oil for Sri Lanka, ”said the Cabinet co-spokesperson and Minister of Foreign Affairs. Plantations Industries, Dr Ramesh Pathirana.
Energy Minister Udaya Gammanpila last month said that $ 267 billion in oil and gas resources hidden in the Mannar Basin could generate three times the country’s total debt.
In a notification to the Official Gazette, the ministry released a block map for joint oil and gas exploration in the Mannar Basin. The map contains 873 blocks of 15×15 km each in the Mannar Basin and will allow investors to easily select preferred plots for exploration.
The Department of Energy has worked to make the map and exploration process engaging for investors in the Mannar, Kaveri and Lanka basins. It was noted that several foreign investors have expressed interest in the mapped blocks.
The recently released map and process aims to attract the world’s 20 largest oil and gas companies to invest in the sector. The project has the potential to deliver more than two billion barrels of oil and nine trillion cubic feet of natural gas, according to estimates.
“They made such a request for a block allocation for the investigation of oil reserves in Sri Lanka, but this was not approved by the Cabinet,” said Minister Pathirana.
He said the government only agreed to pay the interest on the credit facility obtained, adding that it was not possible to set off land for a loan.
In July, an Omani delegation led by Shumookh International Executive Director Abdullah Al Bulushi called on President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa as part of the investment bubble concept.
The delegation also had a series of constructive discussions with Minister of Finance Basil Rajapaksa, Minister of State for Finance, Capital Markets and State Enterprise Reforms Ajith Nivard Cabraal and Minister of State for Development of Duminda Dissanayake solar, wind and hydroelectric power generation projects on specific investment opportunities available. in Sri Lanka. The delegation also made field visits to potential investment sites in Colombo and Hambantota.