Malaysia signs oil & gas pact with Sri Lanka

MALAYSIA and Sri Lanka signed a strategic memorandum of understanding (MoU) on Thursday in the oil and gas sector, which will strengthen bilateral relations and fuel new investment opportunities. 

Malaysia High Commissioner to Sri Lanka Azmi Zainuddin said the MoU was signed between Malaysia Petroleum Resources Corp (MPRC) and Petroleum Resources Development Secretariat (PRDS) of Sri Lanka. 

MPRC is a government agency under the Prime Minister's Department, while PRDS is its counterpart in Sri Lanka. 

Azmi, however, dismissed suggestions that the signing of the MoU has got to do with the recent news reports that Petroliam Nasional Bhd (Petronas) is considering oil well exploration off the shores of Sri Lanka, possibly near the Palk Straits and the Mannar Basin bordering India and the island state. 

According to the reports, the government of Sri Lanka has invited Petronas, through the Malaysian government, to study and review the possibly of working together in exploiting oil and gas resources in the straits and the Mannar Basin. It is learnt that Petronas senior executives are preparing to hold preliminary talks with Sri Lanka officials. 

"We are aware that there was a news report published in the Daily Mirror of Sri Lanka a couple of days ago, quoting the Malaysian Reserve. 

"However, as far as the High Commission is aware, the MoU concluded on Thursday is not related to this development," Azmi said in a reply to Business Times query. 

Meanwhile, PRDC director general Saliya Wickramasuriya said the MoU between MPRC and PRDC will foster partnerships between Sri Lankan and Malaysian companies in the oil and gas sector. 

"We feel that MPRC can help Sri Lankan firms establish contacts and relationships that will help them in a new sector," he said. 

MPRC, formed in 2011, aims to position Malaysia to be the number oil and gas hub in Asia Pacific by 2017.