Bids to be called for three exploration blocks in Mannar Basin

The Sri Lankan government encouraged by the seismic data in the Mannar Basin through the Petroleum Resources Development Secretariat is planning to call for bids for three exploration blocks in the Mannar Basin.

Petroleum and Petroleum Resources Development Minister A.H.M. Fowzie addressing the Offshore Technology Conference in USA said that the government is also planning to acquire seismic data in offshore areas to the south and to the east of the island shortly.

He said that Sri Lanka needs technological assistance to exploit its oil resources. We need the US business community to take part in the bidding for the exploration of oil resources in Sri Lanka. As the world's oldest oil producer, we seek the assistance and partnership of the US Government and the US petroleum industry in exploring Sri Lanka`s oil resources.

The minister said that the seismic data acquired from an internationally reputed Norwegian firm has confirmed the potential for viable oil resources in the Mannar Basin off the west coast of Sri Lanka.

The government is currently in the process of developing a comprehensive oil and gas regulatory system and establishing an effective organisational structure for regulating this industry.

This meeting gives us the ideal opportunity to discuss these developments that are taking place in Sri Lanka and to draw from your expertise in this particular field, he said.

Fowzie said that the global economic recession coupled with the sustained high level of oil prices has already caused an adverse impact on the economies across the world.

The oil prices have skyrocketed, putting an additional strain on the already burdened economies like ours. In this context, we believe that the exploration of oil and gas resources in the offshore area in Sri Lanka will ease our economic burden ensuring the economic security in our country.

Over the last year, our two countries, have pursued a dialogue as how to develop strong oil and gas administration and a vibrant petroleum industry in Sri Lanka. At this moment I would like to invite you to explore the potential for investment cooperation and mutual growth in this regard.

Minister Fowzie said that the trade and economic relations in the recent past have taken shape within the parameters of the trade and investment Framework Agreement (TIFA), signed between the two countries in 2002.

The TIFA provides an ideal platform to our respective governments to engage in a close dialogue over a number of mutually important areas such as market access, intellectual property rights, government procurement, economic cooperation and transfer of technology.

It is pertinent to mention that the US, which accounts for as much as one-third of our total exports, currently ranks as the largest trading partner of Sri Lanka.

Centuries of leverage as the most strategic trading location between the Middle East and Far East have resulted in a cosmopolitan business outlook in Sri Lanka.

The port of Colombo is emerging as the most efficient in the South Asian region. Close economic ties with India and Pakistan, with whom Sri Lanka signed Free Trade Agreements, permit preferential access to the larger market of the subcontinent.

Sri Lanka offers abundant human and natural resources at competitive cost. With a literacy rate of 92% and widespread use of English in business, Sri Lanka's workforce is considered the country's greatest asset, and is known for innovativeness, dexterity in precision work and diligence.

An excellent legal and business framework adds to the attractiveness of the country's investment climate. Comparisons have shown that Sri Lanka offers one of the most liberal business environments in Asia.

The country's investment laws are transparent and automatic across a wide range of sectors. Total foreign ownership is permitted in most areas of the economy and there are no restrictions on repatriation of earnings and capital.

The Sri Lankan government is business friendly and actively pursues a policy of economic liberalisation with emphasis on private sector investment.

Investors will benefit from favourable legislation, fiscal incentives and a streamlined investment system, facilitated by the Board of Investment of Sri Lanka.

Despite a protracted ethnic conflict Sri Lanka has achieved respectable average annual economic growth.

In 2006 the country achieved a GDP growth rate of 7.4% while it has become the largest spender of its GDP on defence compared to some other internal conflict-ridden countries and the second largest in South Asia. However, the country has been able to achieve a remarkable economic growth along with great success in the areas of education, health and nutrition in spite of all these obstacles.

The country has experienced a continuous foreign investment flow in the recent past. In 2006, Foreign Direct Investment to the country was about US$ 600 million which is a 100% increase compared to the previous year.

This indicates that the North- East conflict of the country has not made any negative impact on foreign direct investment in the country.

Sri Lanka is endowed with enormous natural, human and capital resources. The role of government is to unlock value by creating an environment where these resources are used optimally.

The Government of Sri Lanka has given priority to streamline the tax system, restructure public sector enterprises, promote competition, and increase foreign direct investment. Certain projects, which the Government of Sri Lanka encourages, qualify for incentives, to promote product diversification, transfer of advanced technology, value-addition and infrastructure development.

The world stage has changed dramatically over the last few years. Globalisation has opened new linkages between trade, economic development and security. In both the developed and developing world, trade and private investment are now the most important channels for the steady and reliable flow of goods and capital, and economic development constitutes the most positive force of globalisation.

Sri Lanka focuses seriously on attracting investment in the areas of Textile Zones/Textiles, Up-market Tourism, Information Technology, Agro Processing, Gems and Jewellery, Garments Accessories, Pharmaceutical and pharmaceutical-related products, Electronic Products and Components, Power Generation, Air, Rail and Road Transport, Ports, Housing and Business Complexes and establishment and management of Export Processing Zones and Townships.