Sri Lanka Upstream Petroleum Benefits Report

Transcription

PETROLEUM RESOURCES DEVELOPMENT SECRETARIAT
Sri Lanka Upstream Petroleum Benefits Report
July 2008-March 2014
Benefits Division
www.prds-srilanka.com
June 2014
Petroleum exploration efforts so far have resulted in the slow emergence of a new industry with progressive
benefits through direct fiscal gains and added value through participation and the development of national labour,
knowledge, technology, goods, services and research capabilities. The potential of the Mannar and Cauvery
basins, along with that of the ultra deep water Ceylon basin that includes part of the Bay of Bengal submarine fan,
indicate that efforts should be made to increase exploration activity early for maximum economic benefit.
Acknowledgment
The information presented in this report was gathered from the annual Sri Lanka Benefit reports
submitted by Cairn Lanka (Pvt) Ltd, local and foreign service suppliers, the Presidential
Secretariat, University Grant Commission, and the various divisions of PRDS.
This report was prepared by the Benefits division of PRDS under the guidance of Mr. Saliya
Wickramasuriya, Director General of PRDS.
This submission would not have been possible but for the cordial support & cooperation of the
Chairman & members of the Petroleum Resources Development Committee, members of the
Block M2 Management Committee, Cairn Lanka (Pvt) Ltd & it's service providers, staff of The
Presidential Secretariat, PRDS and all the other government agencies, universities and
individuals who were directly and indirectly involved in the upstream exploration program
within the period July 2008 to March 2014.
Lastly, a deep sense of gratitude is expressed for all those who provided information at various
stages of the exploration project over the period concern in completing this task.
Preeni Withanage
Director Benefits
[email protected]
Sri Lanka Upstream Petroleum Benefits Report, July 2008-March 2014
PRDS
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Contents
4-5
Executive Summery
1.0
Introduction
1.1
History
5
1.2
Petroleum Exploration Activity Update
6
1.3
Benefits Associated with the Exploration Activities
6-7
2.0
Socio-economic Impact
2.1
Exploration Expenditure
8
2.2
Involvement of Local Suppliers
9 - 11
2.3
Education and Training Opportunities for Sri Lankan Nationals
11 - 14
2.4
Environmental Research
15
2.5
Employment Opportunities
15
2.6
CSR Activities
16
2.7
International Relations
16
3.0
Picture Gallery
17 - 18
4.0
Annexes
Annex A - Petroleum Exploration Bock Map of Sri Lanka
Annex B - Sri Lanka Upstream Petroleum Local Content Guidelines
Annex C - Annual Exploration Local Content Reporting Format
Abbreviations
CBSL
CLPL
CSR
GoSL
MEPA
PRDS
QHSE
UOM
UOP
UGC
Central Bank of Sri Lanka
Cairn Lanka (Pte) Ltd
Corporate Social Responsibility
Government of Sri Lanka
Marine Environmental Protection Authority
Petroleum Resources Development Secretariat
Quality, Health, Safety and Environment
University of Moratuwa
University of Peradeniya
University Grant Commission
PRDS
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Executive Summery
This report contains the direct and indirect benefits associated with the upstream petroleum
exploration efforts by GoSL within the period commencing July, 2008 ending March 31,2014.
Marking a beginning of a new era, on July 07, 2008 the GoSL entered into a Petroleum
Resources Agreement with CLPL. An exploration license was granted to CLPL for the
exploration block SL 2007-01-001 in Mannar Basin (Annex A). CLPL successfully completed
its first phase work commitment resulting in two successive gas and condensate discoveries in
two of the three exploration wells they drilled in late 2011 and further notified the GoSL of its
intension to enter the second phase of exploration. Commencing activities of the second phase,
they acquired 600 sq.km of 3D seismic data in its block in early March -mid April, 2012 and
drilled their 4th exploratory well in early February 2013. The total exploration expenditure of
CLPL within the period July 2008 to March 31, 2013 was US$ 214 million, of which 10% of
that has been spent in Sri Lanka.
Consequent to the two discoveries by Cairn and the interest shown by several international oil
companies, GoSL decided to stage Sri Lanka's second international offshore exploration
licensing round to offer 13 more blocks in the Mannar and Cauvery basins to investors. It was
launched in Houston on March 07, 2013, followed by road shows in London and Singapore in
subsequent weeks. The bid round was closed on 29th November 2013 and one bid each for three
blocks have been received. Cairn India has bid for a block in Mannar basin while Singaporebased Bonavista Energy Corp bid for two blocks in the Cauvery basin. The preliminary review of
the bids indicates a very robust work commitment of good quality spelling out a significant
amount of both 2D and 3D seismic and a number of commitment wells, which will go a long
way towards gathering enough data to understand the offshore petroleum potential assets better.
In parallel with efforts to market the blocks available, GoSL engaged in discussions with Cairn
on the potential commercialization of their discoveries. Several discussions have taken place
involving PRDS, Cairn, CEB, CPC and Treasury officials on the modalities of production, and
gas pricing mechanisms. Furthermore discussions are underway to offer several large, ultra -deep
water blocks to suitably experienced and capable operators who qualify, for the purpose of joint
study with GoSL towards identifying long-term hydrocarbon potential.
Those successive developments in the oil and gas activities necessitated PRDS to prepare Sri
Lanka Upstream Petroleum Local Content Guidelines and make them effective from March
2013. The Guidelines are mainly focused on developing a skilled workforce, procuring optimal
supplies and services domestically, improving the livelihood of needy communities and
enhancing Sri Lankan professional capabilities and competencies.
During this period, much emphasis was placed on developing local content, specifically to
ensure the promotion and progression of local goods & services, and build capacity in the
education & training sectors. PRDS & Cairn Lanka organized several events with a view to
providing awareness and opportunities for the local suppliers to prepare themselves for deeper
participation in the upstream petroleum industry resulting in an increase of 23% of local
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participation in supply of goods and services by March 2013. According to CLPL annual
benefits reports, within the period of 2008-March 2013, they have spent USD 18 million to
procure goods and services from Sri Lankan suppliers and recorded as the highest percentage
83.6% of the local spend.
Cairn Lanka provided advance training opportunities to GoSL officials and university trainers
engaged in the oil and gas sector to enhance their knowledge in some complex oil and gas
technical areas related to petroleum geology, geophysics, drilling and HSE. PRDS and Cairn
took many efforts to strengthen the educational sector in view of catering to the future potential
human resources requirement in the oil and gas sector in Sri Lanka. Those efforts were mainly
focused on providing internship opportunities both locally and foreign, short training programs ,
public awareness programs and assistance for academic research.
In addition PRDS and UGC were instrumental in facilitating the need to establish oil and gas
related undergraduate and postgraduate degree programs in the local universities. In view of that
PRDS jointly with University Grant Commission organized a two days residential workshop in
early January 2013 with a view to prepare a strategic plan to build the competencies and the
capacities of the academic sector to be progressive with the future oil and gas development
activities in Sri Lanka. CLPL along with few other local service providers provided the bulk of
support to make this event a success.
In summary, the Carin's exploration program has resulted the slow emergence of a new industry
with progressive benefits to Sri Lankan economy in terms of direct fiscal gains such as bonuses,
taxes, annual funds for research, data sales and other fees and levees; and added value through
participation and development of nation labour, knowledge, technology, goods, services and
research capabilities. Apart this program has proved that Sri Lanka has a working petroleum
system in the Mannar Basin and also added very important data to country's exploration data
bank.
1.0
Introduction
1.1
History
Hydrocarbon exploration efforts in Sri Lanka began in late 1960s. This exploration work has
shown that two prospective offshore sedimentary basins situated in Sri Lanka namely the
Cauvery and Mannar basins. Seven Exploration wells were drilled within the period 1970 - 1980.
Those efforts have established the presence of significant reservoir rocks in the Mannar Basin.
Opening a new era for exploration, in 2001 GoSL acquired 5700 lkm of high quality 2D seismic
in the Manna Basin. This encouraged the GoSL to pass the petroleum resources Act No: 26 of
2003 and established the petroleum resources development secretariat to administer all the
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upstream petroleum operations in Sri Lanka. In 2007 GoSL took a strategic step and launched its
first licensing round in 2007 and awarded one exploration block to CLPL, a subsidiary of Cairn
India. The GoSL entered into a Petroleum Resources Agreement(PRA) with CLPL in July 2008
and an exploration license was granted in October 2008 for a span of an eight year exploration
period comprising of three phases of three, two and three years respectively.
1.2
Petroleum Exploration Activity Update, July 2008 - March 2014
Petroleum Exploration Activity
2008
2009
2010
2011
2012
2013
2014
Signing the Petroleum Resources Agreement
(PRA) with CLPL
Issuance of Exploration License to CLPL
Environmental Impact Assessment Study by
CLPL
Acquisition of 1750 sqkm of 3D seismic data by
CLPL
One year long survey to collect metocean data
by CLPL
Drilling of the 1st Exploration Well "Dorado"
by CLPL
Drilling of the 2nd Exploration Well
"Barracuda" by CLPL
Drilling of the 3rd Exploration Well " Dorado
North" by CLPL
Discovered Gas and Condensate
Discovered Gas and Condensate
Acquisition of 600 sqkm seismic data by CLPL
Drilling of the 4th Exploration Well "Wallago"
by CLPL
Second Upstream Petroleum Licensing Round
by GoSL
Work in Progress- GoSL to offer 6 Unexplored
Blocks for Joint Studies
On Going - Analysis of the economic feasibillity
of the Two Discoveries
1.3
Benefits Associated with the Exploration Activities
The benefits associated with this Petroleum activities are comprised of direct fiscal benefits to
the state and local content benefits to the entire society and economy. The direct fiscal benefits
arising from the petroleum activities in favour of state take such as royalty, profit share,
national participation share, bonuses, taxes, fees and other levees have a significant impact on
the host country's economy. The local content referred to as the extra value added to the entire
society and economy of the host country through participation and development of local labour,
goods, services, technology, livelihood of needy communities, knowledge & skills and research
capabilities are equally playing an important role to socio-economic development of the host
country.
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Recognizing the value of progressive local participation at successive stages of the petroleum
operations, the GoSL of Sri Lanka included benefits provisions in the petroleum agreements and
work contacts with a special reference to Upstream Petroleum Local Content Guidelines issued
by PRDS effective from March 2013 (Annex B). Given below is a summary of local content
expectations emphasized in the above documents.
 Minimal recruitment of Sri Lankan employees, who may be deployed globally to acquire
experience with the primary aim of replacing expatriates.
 Maximum recruitment of Sri Lankan nationals to carry out national operations and tasks
 Local capacity building along the channels of education and technology directed towards
knowledge enhancement and expertise development, in order to raise the level of intellect
and competence of the local workforce, which may eventually allow such individuals to
work on par with the well trained and experienced global workforce.
 Engagement of more Sri Lankan professionals and companies in sector-specific joint
research and development programmes and studies.
 Facilitation of domestic industry growth and expansion by encouraging the purchase and
usage of goods manufactured and supplied locally.
 Prioritizing the services of local service providers, as the most preferred channel of
service generation to be incorporated in all sector related tasks.
 Enhancing and improving the living standards and livelihood of needy Sri Lankan
communities by carrying out meaningful CSR programmes.
 Encouraging collaborative initiatives for investment generation within Sri Lanka mainly
by necessitating the establishment of partnership based work programmes.
At the inception, every contractor identified as an eligible partner prepared for investing in local
off-shore Petroleum exploration operations and projects, requires to submit a comprehensive
Local Content Development(LCD) plan outlining the favorable outcome of benefits associated
with education, training as well as other categories, which the nation at large may eventually be
able to derive during various stages of the undertaken operations. However, in compliance with
such targets set at the outset, the contactor should subsequently submit a report containing all
accomplished benefits to Sri Lanka in the prescribed Local Content Reporting Format given in
annex C.
2.0
Socio-economic Impact
This section provides a more detailed picture of the impact of upstream petroleum activities on
socio-economic development of Sri Lanka over the past few years. The GoSL's effort to develop
the petroleum E&P industry through foreign direct oil and gas contractual investments has
resulted in , or contributed to, the development of wide range of local supply (specially
shorebase logistics services inclusive of air and sea transportation services), employment ,
education, training, technology and research. A detail analysis of the benefits extracted and
complied from the annual benefits statements provided by CLPL and GoSL for the period
commencing July 2008 ending March 31, 2014 are presented in the sections below.
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2.1
The total exploration expenditure of CLPL over the period, July 2008 to March 31, 2013 was
US$ 214 million, of which 10% of that total was spent in Sri Lanka. The figure 1 below shows
CLPL annual exploration expenditure and their commitment towards local content development
over the entire period concern . The figure 2 shows the local spend expenditure summary
categorized by major activities. It indicates that the highest portion of the local spend, 83.6% is
spent to procure local goods and services and the rest was shared among training commitments,
base office, CSR, bonuses, taxes, other fees and environmental research.
Figure 1 : Cumulative Exploration Expenditure vs Local Spend ,July 2008 - March 2013
Cumulative Exploration Expenditure vs Local Spend,
March 2008-2013
Exploration Expenditure in USD
250000000
200000000
150000000
214,591,348
100000000
10%
50000000
21,974,045
0
Local Spend
Figure 2 : Local Spend by Major Categories
CSR, 0.7%
Bonuses, Taxes &
other Fees, 11.7%
Sri Lanka Base Office
Cost, 3.3%
Environmenal Fund,
0.6%
Training, 0.2%
Goods & Services
local Spent, 83.6%
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2.2
Involvement of Local Suppliers
Initially the local participation in supply contracts was very minimal, but with time there was a
remarkable improvement in local participation in oil and gas projects and more over a great
enthusiasm among local suppliers to enter into this industry. The participation varied annually
(Figure 3) depend on the type of petroleum activity taking place at the time concern. The
awareness campaigns, public seminars, short training sessions and networking events launched
by PRDS and CLPL in consultation with chambers opened doors for more interested local
suppliers to enter to this industry resulting 23 % (Figure 4) of local direct sub contractor
participation in CLPL exploration activities within last three years. In addition to that there were
many small scale suppliers engaged in providing minor services to those direct local and foreign
service suppliers.
It is a mandatory requirement to obtain a service sub contractor license from PRDS to operate in
Sri Lankan waters and this has resulted a collection of LKR 12.5 million to PRDS as the license
fee for all the licenses issued for the period 2008 to March 2013. The following major service
licenses were secured by the local direct suppliers within the period concern. These service
licenses together with other minor local goods & services supplies such as local travel,
accommodation, equipments, material, etc have contributed about US $ 18 million to the Sri
Lankan economy ( Figure 2).
1. Environmental Monitoring
2. Environmental Impact Assessment (EIA)
3. Maintenance of IT Infrastructure
4. Air Logistic Servicers
5. QHSE Equipment
6. Ambulance Services
7. Cleaning & Forwarding Services
8. Cut & Weld Facility in Sri Lanka Block
9. Manpower Staffing Services for Local Sri Lanka Nationals
10. Shorebase Management Services
11. Storage Yard
12. Supply of Fuel
13. Supply of Water
14. Supply, Installation and Commissioning of IT Infrastructure and Associated Services
15. Visa Processing and Associated Services
16. Well Insurance for Drilling Programme
17. Strategic Consulting, Business Facilitation & Coordination
18. Transport of explosives
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Figure 3 : Annual Direct Service Sub Contractor Licenses Issued by PRDS
Service Sub Contractor Licenses issued by PRDS
FY 2009 -2013
60
50
40
30
20
10
0
2009
2010
2011
Foreign
2012
2013
Local
Figure 4 : Total Involvement of Local Direct Service Suppliers in CLPL Operation
Direct Sub Contractor Licenses issued by PRDS for the Cairn
Lanka Exploration Operations From July 2008 to Aug 2013
23%
Foreign Sub Contractor
Licenses Issued - 98
77%
LocalSub Contractor
Liceses Issued - 29
A wide range of local companies listed below were engaged in one or more of the above
services. Working for this demanding international industry have increased their confidence,
credibility and ambition, leading few companies to their having success outside the Sri Lankan
operations entering into to global oil and gas market. Their involvement have commonly
benefitted them to diversify or expand their existing industry, hire new personnel , train
personnel, set-up officers, warehouses & other facilities, acquire new equipment, improve
technical capabilities, and implement QHSE practices in par with global oil and gas industry.
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The following local companies obtained direct service sub contractor licenses from PRDS for
CLPL exploration operations from 2008 to March 2014.
1. Allianz Insurance Lanka Ltd.
2. DMS Electronics Pvt Ltd.
3. Dockyard General Engineering Services
4. GAC Shipping Ltd.
5. Hayleys Energy Services Lanka (PVT) Ltd.
6. Lanka IOC PLC
7. Lanka Marine Services Pvt Ltd.
8. National Aquatic Resources Research and Development Agency (NARA)
9. Noordeen Hadjiar (Pvt) Ltd.
10. SGS Lanka (Pvt) Ltd.
11. Sri Lanka Insurance Co Ltd.
12. Sri Lanka Shipping Co. Ltd.
13. TATA Communications Lanka Ltd.
14. VSR Consultants (Pvt) Ltd
2.3
Education and Training Opportunities for Sri Lankan Nationals
Local companies, academics, students and individuals were immensely benefitted from the
education and training opportunities that have resulted from the Cairn's growing exploration
activities in Sri Lanka over the past few years. PRDS and CLPL were instrumental in organizing
and sponsoring the programs under five focus areas; Develop Petroleum education in local
universities, Develop local business, Increase public awareness, Short term training opportunities
and internship placements. During this period much emphasis was placed on developing the
petroleum education in local universities with a view to providing background and opportunities
for the local undergraduates to prepare themselves for deeper participation in the emerging local
and global petroleum industry. In this context, CLPL played an appreciable role in providing
training opportunities to GoSL officials and academic trainers to enhance their knowledge in
some complex oil and gas technical areas related to petroleum geology, geophysics, drilling and
HSE aspects. In addition PRDS and CLPL extended their assistance to local undergraduate and
graduates to carry out their research using the petroleum data owning to past exploration work.
Given below the list of education and training initiatives taken by CLPL and GoSL over the
period concern.
2.3.1. Develop Petroleum Education in Sri Lanka
i
CLPL Sponsored a graduate student of University of Sri Jayawardenapura
to carry out a Geophysics Research M. Phil titled “ Interpretation of
Gravity Anomalies over the Southern Continental Shelf of Sri Lanka". LKR
1.4 million to complete the project inclusive of a monthly stipend to the
research student.
30 Months
from September
2010
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ii
CLPL conduced a short training program on “Introduction to Petroleum
Geology, Geophysics and Drilling” at university of Moratuwa for a group of
15 academic trainers. Dr. Nigel Banks of Geosciences delivered the course.
March 22- 5,
2010
iii
PRDS provided assistance to CINEC Maritime campus to conduct three
short training sessions on " Oil and gas Exploration and Production
Techniques". Officials of PRDS delivered the course.
Three programs
2012
iv
PRDS conducted a five day Training Program on " Fundamentals of Log
Interpretation" for a group of 20 trainers of the universities. Mr. Joe
Johnston of Fugro Data Solutions delivered the course.
November 1923, 2012
v
PRDS offered assistance to local universities and institutions to conduct
petroleum related research studies with the use of PRDS expertise and data.
2011-1014
vi
PRDS facilitated two graduates attached to University of Moratuwa and
CBSL to pursue their doctorial and post doctorial studies in Japan using
petroleum data collected during the exploration programs.
2012-15
vii
PRDS jointly with UGC organized a two days residential workshop on "
Competency Building and Capacity Enhancement in the Emerging Oil and
Gas Industry in Sri Lanka". About 100 participants representing local and
foreign universities, institutions and private sector attended.
January
07- 08,
2013
viii
CLPL donated a LKR 1.3 million hardware unit (workstation and
accessories) to UOM to support install petroleum software.
December,
2013
ix
PRDS jointly with UGC and CLPL organized a two days workshop on "
Capacity Building in Petroleum Science & Technology in Sri Lankan
Universities" followed by an educational visit to identify the critical skill
gaps in the petroleum education in Sri Lanka and prepare a plan to achieve
them. A group of 30 comprising six universities and three institutions
attended.
Oct 22-23,2013
x
PRDS conducted awareness sessions on "Petroleum Technology and
Business" for undergraduates attached to three universities, Peradeniya,
Moratuwa and Ruhuna.
2013
xi
Schlumberger Oil Field Services, a leading international oil and gas service
company in collaboration with PRDS organized a Technology Day to
introduce Schlumberger oil & gas software solutions. They donated the
software solutions to two universities , UOP and UOM that supports to
geological, geophysical and petro-physical interpretation and modeling
under Schlumberger Corporate University Relations Program.
November 28,
2013
xii
Schlumberger Oil Field Services provided the opportunities for the Sri
Lankan undergraduates to take part in Ocean Competition which is
organized by them annually amongst the students of various prestigious
universities in India, Bangladesh and Sri Lanka to showcase their creative
Annually,
2012-2014
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ideas and domain knowledge in the form of plug-ins (.NET based
applications) developed using Ocean* framework (~Microsoft.NET)
addressing E & P industry challenges. An undergraduate from UOM
participated for this competition in 2012 and gained immense exposure and
experience about E&P software and applications. PRDS encourages and
facilitates local undergraduates to take part in these competitions held
annually.
xiii CLPL conducted a five day Training Program on "Basin Analysis and
Prospect Generation" at university of Peradeniya. A group of 18 comprising
university trainers and senior officials of GoSL institutions attended the
program. Dr. Carol Hopkins of Robertson UK delivered the series of
lectures.
ix
March 3-7,
2014
PRDS facilitated local undergraduates to take part in the SPE STAR 2014
scholarship program that support those pursuing degrees related to the oil
and gas industry until completion of the degree for which awarded, up to a
maximum of four years. Three undergraduates from UOM and UOP applied
for this scholarship scheme.
2.3.2 Develop Local Business
i
CLPL conducted an oil and gas business partnership meeting in Sri Lanka
for local business leaders to increase local participation in their operational
service contracts.
September 06,
2012
ii
PRDS jointly with National Chamber of Commerce conducted a seminar
on " New Business Opportunities related to Oil and Gas Exploration in Sri
Lanka" . About 200 business leaders attended.
March 14, 2012
iii
PRDS with the assistance of local service providers organized the first Sri
Lanka Upstream Conference 2013 followed by series of business
networking events. About 250 participants comprising reputed global oil and
gas operators and service companies, local business community, GoSL
institutions, educational institutions, foreign companies and interested
individuals attended.
July 09 -12,
2013
2.3.3. Public Awareness Campaign
i
PRDS jointly with Institution of Engineers Sri Lanka conducted a public
seminar on " Current Status of the oil and gas industry in Sri Lanka"
March 20, 2012
ii
PRDS with the help of Heyleys Energy Services conducted a two days
workshop on "Introduction to Modern Petroleum Production Technologies"
for a group of 40 key stakeholders comprising GoSL, industry and
academia engaged in oil and gas activities.
June 14 to 15,
2012
iii
PRDS jointly with CBSL organized a one day awareness session on "
Petroleum Geology for non Geologists".
September 11,
2012
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iv
Officials of PRDS on invitation delivered series of public presentations to
raise awareness and understanding on oil and gas industry at various
platforms.
Half/Full day
within 20122014
v
PRDS organized a presentation on " Global Local Content Development
Initiatives in the Oil and Gas Sector and Adaptation to Sri Lanka". IHS
Global Inc. delivered the presentation.
November 15,
2012
vi
Director Benefits of PRDS represented Sri Lanka as a speaker at the Global
Local Content Summit held in London to deliver a presentation on " A Look
at Petroleum and Local Content Development in Sri Lanka"
September 2425, 2013
vii
Director General of PRDS represented Sri Lanka as a speaker at many local
and international petroleum conferences and seminars.
2008-2014
2.3.4. Short Training Opportunities
i
CLPL provided a familiarization training session to PRDS safety engineer
on health, safety and environment related to petroleum operations at Cairn's
facility in India.
10 Days from
July25-Aug 05,
2010.
ii
CLPL provided an opportunity to PRDS petroleum geologist to attend a
short term staff training program on " Geophysics for Subsurface
Professional" in India.
March 26 -29,
2012
iii
CLPL provided an opportunity to PRDS Petroleum Geophysist to attend a
short term staff training programs on " Seismic and sequence stratigraphy
for play prediction and basin analysis" in India.
May 7-11, 2012
iv
CLPL provided a short training session to PRDS and MEPA officials at
Carin's facility in India on "Oil Spill Response information" as a part of
emergency preparedness prior to Cairn's first drilling campaign.
June 20-22,
2011
v
PRDS officials conducted an awareness program on " Oil spill response
equipments and management" for a group of 30 members of Sri Lanka
Coastguard.
June 19, 2012
2.3.5. Internship Opportunities
i
CLPL offered one paid summer internship placement to a postgraduate
student of Kelaniya University to compile, analyze and report the data
collected from a Sri Lanka oil and gas market survey.
Six Weeks
from July 01,
2011
ii
PRDS offered 15 numbers of Internship placements for local and foreign
undergraduates/graduates at PRDS office under the supervision of PRDS
qualified staff.
Each
1 -3 months
duration
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2.4
Environmental Research
In fulfillment of the commitment towards Environment Protection CLPL has contributed USD
25,000 annually to the Environment Fund maintained by the GoSL of Sri Lanka to support
environmental research by the GoSL. The following environmental research projects were
carried out or planned for using this fund accumulated to USD 125,000 during the period
concerned.
Figure 7 : Environmental research projects carried out utilizing the Environmental Fund
Research Title
Description and Progress
Strategic Environmental
Assessment of the Cauvery
Basin
Following a public tender notification this study was awarded
to EML Consultants PVT Ltd at a cost of LKR 1.7 million.
The scope of the project was to collect existing environmental
data in the area, identify the knowledge and data gaps,
evaluate environmental impact of the associated petroleum
exploration activities and recommend measures to minimize
any adverse effects. This study was commenced in May 2011
and completed in May 2012. The copy of this report can be
obtained from PRDS.
Marine Environmental
Baseline Survey within
Cauvery & Gulf of Mannar
Basin
Work is in progress to conduct an island wide Marine
Environmental Baseline Survey. Expression of Interest were
invited from suitably qualified companies and individuals to
Conduct the above survey for the following study areas;
i.
Sensitive coastal and marine habitats study
ii.
Marine Mammal Study
iii. Metrological and oceanographic(metocean) study
iv.
Resource Survey
2.5
Employment Opportunities
The past exploration activities had very poor impact on employment generation in the oil and
gas sector of Sri Lanka owning to very minimal and limited activities confined only to one
block of the whole basin. There were very few( about 60) permanent positions engaged in
exploration activities related to regularity, technical, logistics, management, etc. and most of
them were attached to the government regulatory agencies, CLPL local office and service sub
contractors. There was a remarkable improvement in short term mobile positions close to
drilling operations, that has given rise to about 100 - 150 each during 2011 and 2013 drilling
operations.
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2.6
CSR Activities
CLPL signed a MOU with GoSL to construct 27 school libraries in Monaragala district and have
completed all 27 libraries by March 2014. According to their last annual benefit statement, they
have spent about US$ 145,000 by March, 2013 for this library construction project.
2.7
International Relations
On the international relations front, several reputed national oil companies(NOCs) and
International Oil Companies(IOCs) held discussions with the Government on potential
exploration and business investment collaboration. The following oil companies purchased US$
1 million 2D seismic data package of the Mannar Basin. In addition there were small quantities
of data purchases by few other oil companies depend on their requirement and interest.
i.
ii.
iii.
iv.
Cairn Lanka (Pvt), Ltd - 2008
Japan Oil , Gas & Metal Corporation - 2009
Total S.A - 2012
Esso Australia Pty Ltd -2013
Apart, the MOU signed in between the PRDS and MPRC (Malaysia Petroleum Resources
Corporation) on October 11, 2012 paved the way for Malaysian investors to collaborate with
their Sri Lankan counterparts to seek possible business opportunities in the oil and gas sector of
Sri Lanka. Also some large IOCs have shown a keen interest to conduct joint studies in ultradeep water areas which have not been explored so far. Discussions are underway to offer several
large, ultra -deep water blocks to suitably experienced and capable operators who qualify, for the
purpose of joint study with GoSL towards identifying long-term hydrocarbon potential.
3
Event Picture Gallery
a. Field Visits to Drill Ships
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b. Short Training Programs and Capacity Building Workshops
c. Second International Offshore Exploration Licensing Round
d. Construction of 27 School Libraries in Monaragala District
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e. Awareness, Training and internship assistance programs PRDS facility
f. Awareness and Training Sessions for the Business Leaders
g. First Sri Lanka Upstream Oil and Gas Conference
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Annex A
Annex B
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Sri Lanka Upstream Petroleum Local Content Guidelines
1. Introduction
The Petroleum Resources Act No. 26 of 2003 is the governing legislation for petroleum
exploration and development in Sri Lanka. The Petroleum Resources Development
Committee (PRDC) established under this Act is responsible for implementing the
provisions of this Act, and the Petroleum Resources Development Secretariat (PRDS),
headed by the Director General, is responsible for the administration and regulation of all
exploration and production activities in Sri Lanka.
These Guidelines have been prepared by the Director General, PRDS for the purpose of
adding extra value to the economy through capacity building of national human resources
and technological advancement of the country through the participation of international
Contractors/ Operators in upstream petroleum operations in Sri Lanka.
To achieve the above purpose, these Guidelines are mainly focused on developing a skilled
workforce, procuring optimal supplies and services domestically, improving the livelihood
of needy communities and enhancing Sri Lankan professional capabilities and
competencies.
2. Objectives
As the regulatory and administrative authority of the Sri Lanka upstream petroleum
industry, the PRDS aims to achieve the following three main objectives in improving Local
Content:
1.
Ensure maximum employment opportunities for Sri Lankan nationals in all areas
and during all phases of upstream petroleum operations.
2.
Improve local capacity building through education, training, knowledge and
technology transfer aimed at increasing local competence levels to those expected
by the international petroleum industry.
3.
Encourage local stake holders to invest in various activities of upstream petroleum
operations and thereby increase the capabilities and competitiveness of the
domestic business community in the sector.
3. Implementation
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To implement the above objectives, the PRDS requires that every Contractor, Operator, Sub
Contractor, alliance partner and other foreign entity involved in any oil and gas projects,
operation and activity in Sri Lanka;
1.
Consider local content as an important element of their overall project development
and management philosophy for project execution.
2.
Submit an annual Local Content Development (LCD) plan, for review and approval
by the PRDS, outlining planned local goods and services sourcing, employment,
education, training, and R&D opportunities earmarked for Sri Lankan nationals, and
initiatives to uplift the livelihood of needy communities, not later than 6 months
from the Effective Date of the relevant PRA or other agreement, and within thirty
(30) days from the beginning of each subsequent financial year. The specific
provisions to be followed are given in Sections 4.a to 4.c below.
3.
Submit a verifiable Local Content report outlining the progress in utilising Sri
Lankan resources during the preceding Financial Year, within sixty (60) days of the
end of each financial year, in a prescribed format with agreed metrics.
Every Investor participating in a licensing round is required, under specific terms of a Bid
Inviting Document, to develop and submit a conceptual Local Content Development Plan
based on the Guidelines as part of the bid package. At the evaluation of bid proposals, a
weighting will be allocated to the proposed local content improvement and enhancement
in line with evaluation parameters specified in the Bid Inviting Document, and the
submitted plan shall form part of any agreement subsequently entered into.
4. Areas of Focus
a. Employment and Training
Every Contractor, Operator, Sub Contractor, alliance partner and other
foreign entity involved in any oil and gas projects, operation and activity in
Sri Lanka shall;
i)
Consider recruiting a minimum number of permanent Sri Lankan
employees who may be deployed globally to gain experience in the
industry, and thereby increase the number and level of technical and
managerial Sri Lankan staff in-country over the exploration,
development and production phases with a view to progressive
replacement of expatriates.
ii)
Employ Sri Lankan nationals for Sri Lankan operations to the
maximum extent possible, making allowance for additional training
that may be required to build local competence to the level required
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to meet generally accepted international standards, and always
encourage its Sub Contractors to act in the same manner.
iii)
Submit, for acceptance and approval by the PRDS, an Activity Specific
Employment and Training Plan before the commencement of any
petroleum activity that involves a considerable number of personnel
at any stage of the project, which shall include:
a)
b)
c)
d)
iv)
Hands on Training/internship opportunities with
the breakdown of the skills needed.
Employment opportunities in support of clauses (i) &
(ii) above.
A time frame for the opportunities listed in (a) and
(b) above to enable members of the Sri Lankan work
force to prepare themselves for such opportunities
Anticipated skill shortages in the Sri Lankan
workforce
Make an annual contribution to the Petroleum Training Fund
maintained by the PRDS, and contribute in kind where possible to the
various training programmes that may be coordinated by the PRDS
from time to time.
b. Knowledge and Technology Transfer
Sri Lanka;
i).
Shall, where beneficial to national development, and at the
request of the PRDS, negotiate in good faith Technical
Assistance agreements with the PRDS, setting forth the terms
by which the technical assistance partner may render technical
assistance and make available industry proven tools and
techniques of a proprietary nature for use in Sri Lanka by the
PRDS. The issues to be negotiated in such technical assistance
agreements may include, but not be limited to, licensing issues,
royalty conditions, confidentiality restrictions, liabilities, costs
and methods of payment.
ii).
May, if suitably qualified, carry out research programmes in
acreage yet unallocated on a production sharing basis, within
the framework of a Joint Study agreement. More details of such
activities can be obtained from the PRDS.
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c. Local Goods and Services
Sri Lanka shall;
i).
Give preference to the purchase and use of goods manufactured,
produced or supplied in Sri Lanka provided that such goods are
offered on terms equal to or better than imported goods with
respect to timing of delivery, quality and quantity required, price and
other terms;
ii).
Give preference to Sri Lankan services or service providers, if such
services are available in Sri Lanka or can be obtained through Sri
Lankan service providers, provided that such services are offered on
terms equal to or better in respect of timing of delivery, quality and,
price compared to foreign service providers.
iii).
Give preference to foreign Sub Contractors who utilise Sri Lankan
goods and services to the maximum extent possible, where direct Sri
Lankan providers or suppliers are not available.
iv).
Not award contracts solely on the basis of lowest price. Where a Sri
Lankan local service provider or company has the capacity to provide
tendered goods or services, such service provider or company shall
not be disqualified provided their price does not exceed the lowest bid
price by more than ten percent (10%).
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ANNEX C
Annual Exploration Local Content
Reporting Format
Petroleum Resources Development Secretariat
Benefits Division - PRDS
August 26,2013
www. prds-srilanka.com
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INTRODUCTION
This document is designed to provide an operator engaged in petroleum exploration activities,
including geophysical, geotechnical, drilling, etc., in Sri Lanka with guidance for the preparation
of the annual Local Content Report which is required under a Petroleum Resources Agreement
and the Sri Lanka Upstream Local Content Guidelines(March 2013 by PRDS).
The operator is required to outline the progress of the Sri Lankan Resources utilized in the
preceding financial year and include the following information as applicable:

a brief description of the exploration activities including time periods during which the
activities occurred;

a total annual local content expenditure summary categorized by major activities.
Appendix A outlines the PRDS's suggested reporting format;

an employment summary, reported in work-months, for the Contractor and all Sub
Contractors dedicated to Sri Lanka exploration program. Appendix B outlines the PRDS's
suggested reporting format;

a summary of education and training provided or sponsored. Appendix C outlines the
PRDS's suggested reporting format;

a description of technical assistance programs provided or facilitated. Appendix D
outlines the PRDS's suggested reporting format;

a description of research and development activities conducted or sponsored. Appendix
E outlines the PRDS's suggested reporting format;

a summary of activities connected with Corporate Social Responsibility as an expression
of goodwill of the operator or any other dedicated to the program. Appendix F outlines
the PRDS's suggested reporting format; and

a listing of activity specific goods and services acquired in Sri Lanka including associated
actual expenditure. Appendix G outlines the PRDS's suggested reporting format;
The annual Local Content Report should be prepared on a financial year basis and should be
submitted to PRDS within sixty(60) days after the end of each Financial Year.
This reporting format guidance will be administered by PRDS, and may be revised from time to
time.
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APPENDIX A
Annual Local Content Expenditure Summary
Activity
Expenditure ($)
Goods and Services
Training & Education
Research & Development
Base Office in Sri Lanka Cost
Technology Transfer
Bonuses/Fees/Levis/Taxes paid to Sri Lanka
Contribution to Training Fund
Contribution to Environment Fund
Any Other
Total Local Spend
Total Contract Cost
% Local Spend
APPENDIX B
Annual Employment Summary - Dedicated to Sri Lanka Exploration Program
Total Employees
Company
Total Sri Lankans
Category
Remarks
Head
Count
Work
Months
Head
Count
Work
Months
Total
Note : Company includes the operator, goods/services/vessel & support vessel sub-contractors
and any other contractors dedicated to the program
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APPENDIX C
Education and Training
Description of the Education/Training
Numbers trained in each
Activity
program(if applicable)
Cost
a. Internship Opportunities offered
b. Training Programs conducted or
sponsored
c. Other educational Assistance
activities conducted or sponsored
APPENDIX D
Technology Transfer
Type of Technical Assistance
Name of
Program
Transferee/Beneficiary
Progress and Cost
APPENDIX E
Research and Development
Title of Research/Development
Description
Activity Conducted or Sponsored
Progress and Cost
APPENDIX F
CSR Activities
Description
Progress and Cost
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APPENDIX G
Goods and Services Procured in Sri Lanka
Type of Goods and Services
Goods/Services
Provider
Contract
Number (If
applicable)
Cost
a. G&G Surveys and Studies
b. Exploration Drilling
c. Appraisal Drilling
d. Other
Total
Notes :
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Sri Lanka Upstream Petroleum Benefits Report

Transcription

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