An agreement was signed between the government and Bellegeo Enterprises Limited yesterday to conduct an airborne gravity, gravity gradiometry and magnetic data survey to support Sri Lanka’s oil and gas exploration. This is the first time such an agreement was signed here.
Highways, Road Development and Petroleum Resources Development Minister Kabhir Hashim and Bellgeo Enterprises General Manager John Macfarlene signed the agreement at the Ministry in Battaramulla. Petroleum Resources Development Secretariat (PRDS) Director General Vajira Dassanayake participated.
Minister Kabhir Hashim said an airborne gravity magnetic survey has never been carried out in Sri Lanka targeting hydrocarbons and through this project, the government will be equipped with modern gravity and magnetic data acquired using modern technology. It will attract world class oil and gas majors to invest in Sri Lanka.
He said the country can store crude oil only for 20 days. Therefore, work has been commenced to construct a tank to accommodate 15,000 cubic meters of crude oil, three tanks to accommodate 7,000 cubic meters and two tanks to accommodate 5,000 cubic meters.
“The pipeline that carries oil from the Colombo port to Kolonnawa is 70 years old. For the last 20 years, no government has taken any action to resolve the issue. We will repair it at a cost of Rs.1, 500 million. It will save about Rs.600 million per year. The cross country pipeline is now ready for operation and that will save about Rs. 4,000 million per year for the country,” he said.
The agreement is valid 10 years and the project will be carried out on a multi-client model. The Bellgeo has six months to raise fund from oil and gas operators and conduct the survey. The project costs USD 1.7 million.
During the period of cost recovery the government will receive 10 per cent of the income and thereafter, 40 per cent income. The government does not have to invest in the project. The data acquired will be a state asset.
(Daily News)