Sri Lanka's Oil & Gas Industry- Private Sector as a Lever for Industry Growth

Sri Lanka's Oil & Gas IndustryPrivate Sector as a Lever for Industry Growth Presented By: Chas Charles CEO/Director Hayleys Energy Services Lanka (Pvt) Ltd. 14th October 2014

Sri Lanka’s Oil & Gas Industry Chronicles

2008

Agreement Award of Blocks

2009/10

- EIA Studies - 3D Seismic Survey - MetOcean Survey

2011

2013/14

Phase 1 Exploration 3 Wells

Phase 2 Exploration of 4th well & Launch of 2nd Licensing Round

FUTURE

Gas Monetization and Commercialization

First Round of Licensing in 2008 – Awarded to Cairn Lanka Pvt. Ltd ( Operator of Block M2) & Launch of 2 nd Licensing Round

Cumulative Exploration Expenditure vs. Local Spend March 2008-2013

-Source: PRDS SL Upstream Benefits Report -

Local Spend by Major Categories

Active involvement of Private Sector in provision of goods and services for key industry activities

• • • • • • • • • • • • • • • • • •

-Source: PRDS SL Upstream Benefits Report -

•

Support Services for Seismic Survey Environmental Monitoring Environmental Impact Assessment (EIA) Maintenance of IT Infrastructure Air Logistic Servicers QHSE Equipment Ambulance Services Clearing & Forwarding Services Cut & Weld Facility in Sri Lanka Block Manpower Staffing Services for Local Sri Lanka Nationals Shorebase Management Services Storage Yard Supply of Fuel Supply of Water Supply, Installation and Commissioning of IT Infrastructure and Associated Services Visa Processing and Associated Services Well Insurance for Drilling Programme Strategic Consulting, Business Facilitation & Coordination Transport of explosives

Involvement of Sub-Contractors in CLPL Campaign  77% Foreign Subcontractor licenses issued  23% Local subcontractor licenses issued.

-Source: PRDS SL Upstream Benefits Report -

Present & Future Involvement of Private Sector Operators Tier 1 Upstream

Support Services

Downstream

Facility Management & Catering Sea/Air Transportation Warehousing & Logistics

Services that can be promoted among SL companies

Tier 2 Main Contractors Engineering / Procurement/ Construction/ Installation & PreCommissioning Contractors

Tier 3 Sub-Contractors Consultancies / Manufacturers/ Inspection Specialists

Communications Recruitment Training HSE Services Medical Services Banking/Finance Legal Insurance Accountancy Energy Consultancies Hotel Accommodation Visa & Other associated services

Services SL companies have offered already

MALAMPAYA DEEP WATER GAS TO POWER PROJECT

13 Years 1989

Seismic Studies by Occidental Philippines Inc. 08/24/17

1990

Shell Philippines assumed operatorship of well

1991

1997

Discovery of Malampaya Gas Field

National Power Corporation (NPC) enter into a Gas Sale and Purchase Agreement (GSPA) with Power Plant (1200 MW).

1998

Joint Declaration of commerciality of Gas Field

2001

Inauguration and commissioning of Malampaya at the on-shore gas plant

2002

Commercial production of 400 mmscfd to fuel the 2700 MW of gas fired power plants The gas produced from the field is transported via a 504 km, 24 inch pipeline that transport the gas from the gas field to shore

First

Licensing Round –

• Mannar Block # SL2007-01-01 awarded to Cairn Lanka (Pvt.) Ltd hosts two significant and potentially commercial discoveries (Dorado 91H/1z and Barracuda-1G/1) • Subsea development of the Dorado deep-water gas discovery, which is intended to meet 20% of Sri Lanka’s power generation needs.

• Investments in distillate-fired power plants and pipelines to transport gas to shore

Industry Opportunities Ahead

• Employment and Training

Capacity Building- Role of Private Sector

• Recruit permanent Sri Lankan employees and deploy globally • Activity specific training and employment • Increase Sri Lankan employees to the maximum extent possible

• Knowledge and Technology Transfer • Close co-operation with private technology owners • Joint ventures with international oil and gas companies

• Development of a Strong Supplier Base through, • Partnerships with International Players • Cross-sector Strategic Partnerships • Acquisitions or Alliances to gain New Capabilities

• Building an Oil and Gas specific Resource Pool - ( Petroleum Engineers/Technicians/Project Managers etc.

• Developing capacities to build Sri Lanka as an Oil and Gas Regional Hub • Attract major international oil field servicing companies to bring sizeable shares of their global operations to Sri Lanka • Enter into joint ventures with international oil & gas companies • Build regional champions

Energized & Encouraged Private Sector can be an effective Game Changer……

“A Powerful Lever for Growth!!”

Thank You Chas Charles CEO/Director Company Number: PV 65845 Thurburn Wing, 400, Deans Road, Colombo 10 (01000), Sri Lanka Hot Line: +94 11 2167000: 7082 General Line: +94 11 2167082 Mob Number: +94 777 559022 Email: info@hayleysenergy.com

Website: www.hayleysenergy.com