As the Sri Lankan government prepares to embark on offshore petroleum exploration, a leading Norwegian expert has cautioned against heavy investment in fossil fuel infrastructure at a time when the world is rapidly transitioning to renewable energy.
Speaking to the Daily Mirror during a recent visit to Colombo, Professor Peter Mosby Haugan, Policy Director at the Institute of Marine Research and the University of Bergen in Norway, described upstream petroleum development as a “risky investment.” He was in Sri Lanka to attend an international seminar organized by the Pathfinder Foundation.
“It is a risky investment. It takes time to develop, and the required infrastructure is extremely costly. Once built, such infrastructure needs to be used for decades to justify the investment. If you build an oil platform or a pipeline, you’re essentially locked into that economic model for the long term,” Prof. Haugan explained.
He also pointed out the rapidly declining costs of renewable energy technologies. “We are seeing solar panels and other renewable energy sources becoming more affordable. So, I would be cautious about investing in petroleum,” he added.
The Sri Lankan government recently announced its plans to call for international bids to invest in offshore petroleum exploration. It is currently in the process of selecting a marketing consultant in preparation for launching a new licensing round for oil and gas blocks in the Mannar Basin. Cabinet approval has already been granted for this initiative.
Exploration and drilling activities conducted by Cairn Sri Lanka (Pvt) Ltd—a subsidiary of Cairn India—in 2011 led to the discovery of two natural gas deposits and confirmed the presence of a viable hydrocarbon system in the M2 exploration block of the Mannar Basin.
