02 September 2009

Sri Lanka to Call for Fresh Bids for Oil Exploration

01st September 2009, www.lankabusinessonline.com

Sri Lanka will soon call for fresh bids for oil exploration in the waters of the Mannar Basin off the north-west coast, Central Bank governor Nivard Cabraal said.

The island has already given out one block to Cairn India, a unit of Britain's Cairn Energy.

Oil exploration is an area where Sri Lanka has much potential in future, Cabraal told an investment conference in Colombo attended by more than 40 Thai enterprises.

The even is being held to attract foreign investment to the island after it ended a 30-year ethnic war with the defeat by government forces of Tamil Tiger rebels in May.

"Soon Sri Lanka will call bids for new blocks in oil exploration," Cabraal said.

Cairn India has said it plans to do more seismic surveys next year and dig test wells.

Cabraal said oil exploration was one of the sectors that have potential in the country as the government prepares a blueprint to revive the economy after decades of war.

The end of the war has opened up fresh opportunities for the country which investors had long shunned because of the violence despite the opening up of her economy as far back as 1977, he said.

"We opened our doors in 1977. We have been consistently opening new doors at regular intervals. The difference today is that earlier it was open but people feared to enter," said Cabraal.

"If you did enter you might perhaps have felt there's some dangerous animal, perhaps Tigers are inside. And you may not have wanted to enter or only the brave would enter.

"Today, Sri Lanka has been able to change - the dangerous situation that would have been there when you opened the door is no longer there."

The government has managed to drastically reduce inflation and interest rates and bring about both economic and political stability which investors look for, Cabraal said.

"The ability of Sri Lanka to eradicate terrorism has truly opened up new vistas, new dimensions for our country.

"Many countries earlier consider safe havens with extremely good political stability are no longer able to deliver that but Sri Lanka can."

The government has also started major infrastructure development such as roads, ports and water supply in almost every part of the country to ensure equitable development and prevent political problems recurring.

"These ports are not being done for the next 10 years, they are not being done for the next 20 years. They are being done for the next century," Cabraal said.

"Today we’re setting out the blue print for the next century - so people can invest knowing that these developments are taking place."

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