Volume VI

Petroleum Resources Act

Arrangement of Sections

1. Short title and date of operation.

2. Objects of the Act.

PART I

PETROLEUM DEVELOPMENT AUTHORITY OF SRI LANKA

3. Establishment of the Petroleum Development Authority of Sri Lanka.

4. Powers, duties and functions of the Authority.

PART II

ADMINISTRATION AND MANAGEMENT OF THE AUTHORITY

5. Constitution of the Board of Directors.

6. Chairperson of the Board.

7. Disqualifications for being appointed as a member of the Board.

8. Terms of office of the appointed members of the Board.

9. Removal, resignation etc. of appointed members.

10. Quorum and the meetings of the Board.

11. Acts or proceedings of the Board deemed not to be invalid by reason of any vacancy.

12. Seal of the Authority.

PART III

OWNERSHIP OF PETROLEUM RESOURCES AND PETROLEUM DATA AND FORMULATION
OF NATIONAL POLICY ON UPSTREAM PETROLEUM INDUSTRY

13. Ownership of petroleum resources and petroleum data.

14. Policy Advisory Committee.

PART IV

DEMARCATION AND DESIGNATION OF BLOCKS OR AREAS, ENTERING INTO PETROLEUM RESOURCES AGREEMENT OR JOINT STUDY AGREEMENT AND
GRANT OF EXPLORATION LICENCES ETC.

15. Petroleum Resources Agreement or Joint Study Agreement.

16. Demarcation and designation of exploration blocks or development blocks.

17. Calling of proposals for the conduct of petroleum operations in respect of defined exploration blocks.

18. Petroleum Resources Agreement.

19. Joint Study Agreements.

20. Development Licence.

21. Transfer or assignment of a participating interest.

22. Responsibility of persons with a participating interest.

23. Licensing of service providers.

24. Unit Development Plan.

PART V

NATIONAL PETROLEUM OPERATOR

25. Minister to designate a body of persons to be the National Petroleum Operator.

26. Extent of State’s participating interest.

 

PART VI

FISCAL PROVISIONS

27. Terms as to production sharing.

28. Fiscal stability.

29. Determination of profits and income.

PART VII

CHIEF EXECUTIVE OFFICER AND STAFF OF THE AUTHORITY

30. Appointment of a Director-General of the Authority.

31. Powers, duties and functions of the Director-General.

32. Staff of the Authority and remuneration.

33. Appointment of public officers to the staff of the Authority.

34. Appointment of officers from higher educational institutions to the Authority.

PART VIII

PETROLEUM RESOURCES DEVELOPMENT FUND

35. Establishment of the Petroleum Resources Development Fund.

36. Financial year and the audit of accounts.

PART IX

GENERAL PROVISIONS

37. Acquisition of property for contractors.

38. Directions of the Minister.

39. Delegation of powers, duties and functions of the Board.

40. Delegation of powers, duties and functions by the Director-General.

41. Powers of entry.

42. Annual report.

43. All members of the Authority etc. deemed to be public servants.

44. Authority deemed to be a Scheduled Institution.

45. Expenses to be paid out of the Fund of the Authority.

46. Offences.

47. Offences by a body of persons.

48. Regulations.

49. Rules.

50. Repeals, savings and transitional provisions.

51. Interpretation.

52. Sinhala text to prevail in case of inconsistency.

21 of 2021.

AN ACT to provide for, the establishment of the Petroleum Development Authority of Sri Lanka; the formulation of a national policy on upstream petroleum industry and regulation and management structure capturing the maximum economic value of domestic petroleum resources through modern exploration, development, production and management practices in Sri Lanka; to repeal the Petroleum Resources Act, No. 26 of 2003; and to provide for matters connected therewith or incidental thereto.

[Date of Commencement: On Notice]

1. Short title and date of operation.

(1) This Act may be cited as the Petroleum Resources Act.

(2) All the provisions of this Act, other than the provisions of Part V, shall come into operation on the date on which the certificate of the speaker is endorsed in respect of this Act in terms of Article 79 of the Constitution.

(3) The provisions of Part V of this Act shall come into operation on such date as the Minister may, by Order published in the Gazette, appoint for such purpose.

2. Objects of the Act.

The objects of the Act shall be—

(a) to establish a Policy Advisory Committee to advise on formulation of a National Policy for the upstream petroleum industry covering the exploration, development, production, and management of all petroleum resources in Sri Lanka;

(b) to provide the legal framework to regulate all processes of the exploration, development, production and management of all petroleum resources in Sri Lanka including the provision of operational guidelines;

(c) to establish an independent, efficient, and transparent regulatory framework in relation to the exploration, development, production and management of petroleum resources in Sri Lanka;

(d) to manage the available petroleum resources in an equitable, safe, and environmentally sustainable manner; and

(e) to design, implement, monitor and revise fiscal regimes that meet evolving economic needs of the country, while providing fiscal stability to contractors.

PART I

Petroleum Development Authority
of Sri Lanka

3. Establishment of the Petroleum Development Authority of Sri Lanka.

(1) There shall be established an Authority to be called and known as the Petroleum Development Authority of Sri Lanka (hereinafter referred to as the “Authority”).

(2) The Authority shall, by the name assigned to it by subsection (1), be a body corporate and shall have perpetual succession and a common seal and may sue and be sued in its corporate name.

(3) The Authority shall be responsible for—

(a) making recommendations in respect of the National Policy on Upstream Petroleum Industry to the Policy Advisory Committee;

(b) implementing the provisions of the Act; and

(c) performing all regulatory functions connected to the upstream petroleum industry in Sri Lanka, in the manner provided for in the Act.

4. Powers, duties and functions of the Authority.

The powers, duties and functions of the Authority shall be—

(a) to prepare a map dividing the offshore and onshore areas into graticular sections to demarcate and designate exploration blocks and development blocks and to define and demarcate areas to be designated for joint studies;

(b) to promote and market acreage available for investment in the blocks as demarcated and designated in terms of section 16;

(c) to negotiate with contractors the terms and conditions to be incorporated into each Petroleum Resources Agreement, where necessary, in consultation with the Negotiating Committee appointed by the Cabinet of Ministers;

(d) to issue all licences and certificates as may be required to be issued in terms of this Act and to cancel, suspend, vary or amend the same;

(e) to determine and charge the licence fee for licences issued in terms of this Act;

(f) to issue such directions and guidelines as may be required to regulate petroleum operations;

(g) to enter into all agreements relating to the upstream petroleum industry, such as agreements pertaining to data acquisition, licensing and management of data;

(h) to make recommendations to the Minister on matters relating to the assignment or transfer of a contractor’s participating interest in a Petroleum Resources Agreement, on such terms and conditions in keeping with the objects of this Act;

(i) to provide all infrastructural and other administrative support as may be required in the process of calling for, evaluation of and awarding of bids;

(j) to employ such staff as may be required for the Authority to achieve the objects of this Act;

(k) to perform competent and responsible regulation of an internationally competitive upstream petroleum industry;

(l) to acquire and hold, take or give on lease or hire, mortgage, pledge, sell or otherwise dispose of, any movable or immovable property;

(m) to accept grants, gifts or donations from persons or bodies of persons within or outside Sri Lanka:

Provided that, notwithstanding anything to the contrary in any other provisions of this Act, the Authority shall obtain prior written approval of the Department of External Resources in respect of all foreign grants, gifts or donations in cash;

(n) to open and maintain accounts, including in foreign currencies, in any bank or financial institution as approved by the Board, and to administer the Petroleum Resources Development Fund in terms of this Act;

(o) to issue such guidelines and directions as may be required for efficient and effective management of petroleum operations and, for management of petroleum operations in the event of a disaster;

(p) to monitor and control activities which are necessary for or conducive or incidental to, achieve the objects of this Act; and

(q) to do all such other acts and things which may be conducive or incidental to, the attainment of the objects of this Act.

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