Colombo Telegraph

Gassing Off: The Strange Allegations & Worrying Deals Of Champika Ranawaka

By Rajiva Wijesinha

Prof. Rajiva Wijesingha

It is now established that there was no truth in the claim in the President’s manifesto that ‘If a total of Rs. 7.3 billion is spent per kilometre on the construction of the Kadawata – Kerawalapitiya highway, the amount pilfered is Rs. 5.2 billion.’

I was wondering who had contributed that particular charge to the manifesto, and was told that it might have been Champika Ranawaka. This is possible, for he made several charges in those days, in particular in relation to his earlier portfolio of Power and Energy.

On January 3rd he claimed that ‘The Maithripala Administration will carry out an investigation into the failure by the present regime to collect a sum of US$7 billion which is owed to Sri Lanka by Cairn Energy’. This led a TV channel to inquire on January 11th ‘Sri Lanka’s oil exploration under Minister Champika: Will Cairn agreement be exposed?’

The reference was to supposed discoveries by this company with regard to an area in the Mannar Basin which it had received a license to explore for gas. It was claimed in 2011 that a deposit of two trillion cubic feet of natural gas (worth at least six trillion US Dollars), which is worth more than 10 years of our Budget requirement, was discovered by the company. The last government was in the process of making arrangements to bring technological support to commence production of the above gas resources.

Nothing of the sort happened. Nor have we heard more of the National Oil Company to oversee oil/gas exploration that Champika announced on February 4th.Instead it was reported at the end of April that ‘Cairn India exits Sri Lanka oil exploration’ with nothing exposed and no $7 billion collected from them. And then in June it was reported that ‘bids have been received from three other companies – Tootal, Shall and Exxon-Mobile – for exploration’ in the Mannar area. The same news item said that Tootal, a French company, had been awarded the tender ‘for the exploration for oil and natural gas off the eastern coast of Sri Lanka’.

The three companies mentioned are all Western ones, which is no bad thing in itself. But one is reminded of what happened the last time Ranil Wickremesinghe was in government when the rights to explore the Mannar basis were given to a Norwegian company. The contract was signed in February 2002 and allowed TGS NOPEC ‘to sell the data collected by it to third parties too’. Four years later the Sri Lankan Government paid 8.5 million dollars to purchase the entire data.

It sounds strange that we should have had to pay so much (according to another source more, $10.5 billion) to a company that had collected data about our oil and gas, given that it had already sold the data to another company. I do not have the contract for the seismic study it undertook, but I do worry about Ranil Wickremesinghe being in a position to award such contracts.

A couple of months ago I thought Champika was able to stand up against him but clearly this is no longer the case. His current readiness to deal only with the West is worrying, as also what seems his joining the party himself with Cabinet papers that seem designed to spend more of the Sri Lankan people’s money than is necessary. The Ministry of Power and Energy recently proposed buying the 60MW Barge Mounted Power Plant currently in Colombo Port at a cost of Rs 640 million. The Barge is owned by Colombo Power (Pvt) Ltd, and has been in operation for the last 10 years, which would suggest it might not be fully functional now. Of course there was provision to take over the barge in the earlier agreement, but I presume that was also signed when he was the Minister in charge.

Instead of all these highly individualistic approaches to our oil and gas reserves, we should rather develop a coherent policy, looking at sensible examples from other countries. I should note that in this context Norway does have much to offer, because the Pension Fund it set up when it was realized it had massive reserves has done much to ensure that the people of the country benefit from its resources. It has also given the country enormous clout internationally, given the size of its investment portfolio.

I believe we should now urge the President that contracts of the sort Champika (and Ranil) are offering left, right and centre, while Parliament is in recess, are suspended until a duly elected government is in place. And we should also urge him to set in place monitoring mechanisms to ensure that the resources and the funds of the people are not pilfered.

To put the questions that have arisen in a nutshell

The new Contract with Tootal

  • Why was the tender with Tootal signed hurriedly during a general election?
  • What were the terms and conditions of the contract?
  • Was it on the basis of an open tender?
  • How many bidders were there, and who were they?
  • Who evaluated these bids?
  • What were the bidders’ names?
  • What was the bid price of Tootal Oil?
  • Is it similar to the contract the Ranil Wickremesinghe government signed in 2002 with the Norwegian Company TGS NOPEC for a seismic survey for the Western Coast of Sri Lanka, bearing in mind that GOSL had to pay approximately US$10 million to get back the Data from this survey?
  • Will Tootal be able to sell the data to others, as was the case with TGC NOPEC, and how much might they make on such sales?
  • What does the government stand to make from this contract?
  • Who are the local Agents for Total Oil?

The former Contract with Cairns

On 5 January 2015, just before the presidential election, the former Minister Champika Ranwaka had declared that the Cairns India had unlawfully made a profit of US$ 7 billion out of the discovery of gas in the Mannar Basin. He promised to the nation that the new government would take appropriate action to recover this colossal amount of money from Cairn.

The present Government came to power on January 8, 2015. But during the past 6 months Cairns India was allowed to pull out from the Mannar Basin exploration and the money, Minister Champika Ranawaka had promised to recover from Cairn India has not been received, nor even talked about.

Questions we should be asking:

  • Was the US$ 7 billion Minister Ranawaka spoke about unlawful profit, and it so what happened to it?
  • Why was Cairns India allowed to get away without returning this colossal amount of money, if Minister Ranawaka’s allegation was correct?
  • If the allegation was not correct, who benefited from the arrangement?
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