|Norwegian oil pact halted
By Santhush Fernando
President Mahinda Rajapakse narrowly salvaged Sri Lanka’s oil
prospectus by ordering the termination of a pact with Norwegian
oil company TGS-NOPEC and by appointing a negotiating committee
comprising independent persons, during a meeting with oil
industry stakeholders last Thursday.
President Mahinda Rajapaksa has directed the Acting Attorney
General C.R. de Silva to examine breaches in the controversial
oil exploration seismic survey agreement and to also review an
amendment agreement that has been submitted by Petroleum
Ministry to Cabinet without obtaining any legal advice.
Following legal opinion of independent persons and the Attorney
General it was held that TGS-NOPEC was in breach of the
agreement it had entered in 2002 with Ceylon Petroleum
Corporation and thereby had caused ground for the government to
terminate the agreement.
The then CPC Chairman Daham Wimalasena entered into a pact with
TGS-NOPEC on February 13, 2002, authorizing the Norwegian
company to conduct seismic surveys in territorial waters of Sri
Lanka in three phases.
Further it was noted that if Sri Lanka enters in to an agreement
with India or China for the allocation of blocks on direct
nomination basis without international open bidding it would
tantamount to the breach of the 2002 agreement by Sri Lanka and
thereby make Sri Lanka liable to pay compensation.
It also transpired at the meeting that Petroleum Resources
Development Ministry Secretary A. P. A. Gunasekera had not
sought the opinion of the Attorney General as directed by the
Cabinet of Ministers on July 6.
It further came to light that the President and the Cabinet of
Ministers had been misled to wrongfully assume that the
government was in breach.
President Rajapakse had directed Treasury Secretary Dr. P. B.
Jayasundara to procure necessary funds to obtain data and added
that there had been instances where Sri Lanka had paid
compensation to matters having no earning potential, whereas in
this case it was the country’s biggest economic asset.
During the meeting with Petroleum Ministry officials and state
enterprises, watchdog- Strategic Enterprises Management Agency (SEMA)
had refuted a recent Cabinet Memorandum allocating oil
exploration blocks to India and China it was claimed.
A new agreement to cover up an earlier agreement said to be
unfavourable to Sri Lanka was also halted pending Attorney
Generals’ advise, The Nation learns.
The group was represented by Chief Operating Officer (COO) of
Reconstruction and Development Agency (RADA) Saliya
Wickremesuriya, Petroleum Resources Development Minister A. H.
M. Fowzie, Ministry Secretary A. P. A. Gunasekera, Director
General (PR-DG) of the Petroleum Resources Development Committee
(PRDC), Dr. Neil de Silva and Minister Fowzie’s son Nawzer
It is estimated that Sri Lanka’s oil prospective is
approximately nine billion barrels amounting to one per cent of
the world oil potential.