Mar 15, Colombo: The Sri Lanka government is to develop an oil and gas regulatory system and establish a regulatory authority with a 51 million rupee grant from the United States Trade and Development Agency.

This will involve developing laws pertaining to oil exploration in the island nation, where recent studies have revealed possible oil deposits.

Expressing the need for a well-established regulatory system to attract investors for oil exploration, US Ambassador to Sri Lanka Robert O. Blake said in a statement that the grant would help Sri Lanka's oil and gas regulations to move from a 'consumer-driven to a production-oriented' structure.