Sri Lankan Firms Gearing up to Provide Support

Sri Lankan firms are gearing up to provide petroleum support services as off-shore oil exploration and development begins to take-off, officials said.
Following the sale of the first off-shore oil exploration block to Cairn Energy, Sri Lankan firms had supplied logistics to the seismic and drilling vessels that arrived.”Sri Lankan companies provided the support services which were pretty complex,” Chas Charles, chief executive of Hayleys Energy Services told a business forum in Colombo.”But the hydrocarbon services came from abroad. We are pretty well geared up to support the oil industry on logistics, supply chain, warehousing.”

Hayleys Energy is one of several companies set up by Sri Lankan business groups to support the reenfield oil business in Sri Lanka.

A Japanese drilling vessel that came had 147 people on board. In a drilling program different types of people are needed at different times and people also went on shore leave and new crew came, requiring helicopter services.

Sri Lanka’s Navy also provided security.

Head of Sri Lanka’s Petroleum Development Secretariat Saliya Wickramasuriya said he would like to see more Sri Lankan firms and people getting into the industry.

A second bidding round that is now underway had attracted strong interest with the first block having found traces of gas and several blocks are expected to be sold, which will increase opportunities for Sri Lanka firms to win business in 2014.

Charles said Sri Lankan companies can move up the ladder and start providing cementing services, mud services and logging services.

“Sri Lanka has to move up the ladder from providing logistics to the next step of providing technical services,” Charles said.

“We are moving slowly I think we need more training.”

Officials said Sri Lanka universities have to start teaching petroleum industry related courses for Sri Lankans work in the core hydrocarbon services sector and there have been initial discussions to start a Masters program in petroleum.

They were speaking at a regional conference on ports and logistics organized by Seatrade Communications a consultancy and Sri Lanka Ports Authority.

Asked by a member of the forum whether Sri Lanka would mandate a set percentage of local purchase of services by employing the coercive power of the state against oil exploring companies, like Nigeria had done, Wickramasuriya said it was too early for such moves.

Sri Lanka still did not have proven reserves yet and unlike Nigeria and foreign companies could go around rules by striking partnerships with local firms.

“In this day and age what is local and what is global?” he asked. “We felt that it is best to be more collaborative than restrictive,”

He said the petroleum secretariat had instead specified guidelines to operators giving priority to local goods and services allowing for maxim knowledge transfer and opportunity for local business.

Wickramasuriya himself had worked abroad in the oil industry in companies in free countries that were employing ‘foreigners’.

Charles also a Sri Lankan who has a UK education worked for more than three decades in several parts of the world in the oil and gas sector with Haliburton a US based company allowing for knowledge transfer freely.

Sri Lanka’s Colombo Dockyard has also been building oil supply ships and exporting them to free trading countries like Singapore at world class quality and prices.

Each oil rig may need about three oil supply vessels industry officials said.

Industries that receive state protection can become inefficient and unable to compete globally.

Officials were also looking in to the possibility of setting up a specialized free zone for oil supply and related services.(LBO)


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