Sri Lanka’s Petroleum Development Act to be effective from October
The new Petroleum Development Authority Act (PDA) that contains legal provisions regarding petroleum and natural gas exploration is expected to come into effect in October 2021, according to The Morning.
Secretary to Sri Lanka’s Ministry of Energy, K.D.R. Olga has told The Morning that the effective date will be decided following Parliamentary approval of the relevant Bill within a few months’ time, and thus expects the Act to come into effect by October.
She has explained that the Petroleum Resources Bill would specify some of the legal provisions regarding oil and gas exploration and production industries, as well as establishing provisions to ensure the security of investors in this field.
The investment provisions are to be included as the Ministry of Energy expects this sector to attract vast investment due to the potential in the country’s energy sector, but it was observed that existing provisions in the Act are not robust enough in attracting foreign investors, the media report noted.
When it comes to institutional provisions in said Bill, Secretary Olga has highlighted that the Petroleum Development Secretariat does not function in terms of a proper institute and the Ministry of Energy anticipates establishing an apex body on the matter of hydrocarbon resources, dubbed the Petroleum Resources Development Authority (PRDA), and appointing a board under the mentioned authority, according to the report.
The Ministry is also looking forward to excavating and extracting the hydrocarbon deposits discovered within the Mannar Basin, and has decided that the process should be performed through investors selected by auction.
The new Act is expected to greatly benefit the country in terms of generating capital domestically.
Sri Lanka’s energy industry is a fast expanding sector in the country. With Sri Lanka fast becoming a business hub in the South Asian region given its geographical positioning in the Indian ocean and the many trade agreements as well as trade concessions enjoyed by the country, the energy sector is continuing to expand. The government of Sri Lanka has also announced improvements to laws that govern the country’s energy sector in a bid to further open the sector to foreign businesses/investors. The country is also gearing to commence oil and gas exploration, which would further boost Sri Lanka’s energy sector. Foreign businesses/investors could explore the growing opportunities in Sri Lanka’s energy industry.
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