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* Cabinet approval to establish a company for oil and gas exploration - Energy Minister
Sat, Nov 27, 2021, 11:57 am SL Time, ColomboPage News Desk, Sri Lanka.

Nov 27, Colombo: Minister of Energy Udaya Gammanpila said at a media briefing at the Ministry of Energy yesterday (26) that the Cabinet has approved the establishment of the Sri Lanka Oil and Gas Company to commence oil and gas drilling in Sri Lanka and overseas.

Accordingly, the Sri Lanka Oil and Gas Company to be established in the future will be able to conduct oil and gas exploration in Sri Lanka and abroad in another 10 years, he said.

“Accordingly, we will be able to carry out exploration activities without attracting foreign companies. This is how Petronas in Malaysia and ONGC in India were born. It was decided to set up such a company following those example

He said the purpose of setting up the company was to ensure that the people of the country rather than a handful of officials or politicians benefit from the oil exploration in Sri Lanka.

The ‘National Policy on Sri Lankan Natural Gas’ has declared that the Government would take actions to establish a national natural gas company under the public — private partnership applicable to storing, construction of pipelines, transportation and distribution infrastructure facilities development, ownership and monitoring including local natural gas exploration and production so that engaging in local exploration and production with commercial capability.

The company is proposed to be established as a subsidiary company of Lanka Petroleum Corporation and the company will be entrusted with the responsibility of performing the activities and functions entrusted to it in terms of section V of Petroleum Resources Act No 21 of 2021.

The Minister also said that the establishment of a fuel price stabilization fund was approved at the last Cabinet meeting and this would help keep fuel prices as stable as possible, preventing people from being affected by price fluctuations in the world market.

“What needs to be done at this moment is to immediately implement a pricing formula for Sri Lanka,” the Minister said adding that while people question why proposing a pricing formula after criticizing Mangala’s pricing formula, there were two main issues in Mangala’s formula - lack of transparency in pricing and a price stabilization fund rather than a price formula is more appropriate for Sri Lanka.

Minister Udaya Gammanpila further said that the price stabilization fund is more suitable for Sri Lanka but it is in the interest of the country to have at least a price formula rather than doing nothing.


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