Padraig Colman

Rambling ruminations of an Irishman in Sri Lanka

Lanka’s oil rich hopes

This article was published in The Nation on November 20 2011

 

In his treatise Petroleo y Dependencia, Juan Pablo Pérez Alfonzo, principle architect of OPEC, wrote: “Oil will bring us ruin. It’s the devil’s excrement. We are drowning in the devil’s excrement.”

 

Once again, fantasies of Sri Lanka becoming oil-rich are bubbling to the greasy surface.

 

Sri Lanka imports nearly 30 million barrels of oil a year, which is used to generate electricity as well as for transport, every year. This used to cost around $800 million a year. In 2005, it cost $1.64 billion. In 2006, higher international prices took the bill to $2.2 billion. Add to this, $19 million per month in subsidies, the knock-on effect of transport costs on prices and the never-ending cost of war and reconstruction and one can see why the government would like to have its own oil.

 

India started exploring the Cauvery Basin in the Palk Straits as long ago as 1954, drilling 100 test wells. From 2000, India started production from fields close to Sri Lanka at the rate of 1,000 barrels per day. In the late 1970s, the Ceylon Petroleum Corporation, assisted by US and Russian companies, drilled seven test wells on and offshore in the Gulf of Mannar Basin without success. India’s success encouraged Sri Lanka to try again. The Cauvery and Gulf of Mannar basins are said to be associated with rift complexes of the Late-Jurassic-Cretaceous Age and have the potential to yield 100 million barrels.

 
Gamble

 

An oil bonanza cannot be confidently predicted without drilling. Offshore wells require more than $10 million each and the investor loses it all if the well is dry. It will be at least five years before there is any return on the investment.

 

The Director General of Petroleum Resources, Dr Neil R de Silva said in January 2007 that the picture was still “fuzzy” about how viable the fields were. “One of the requirements oil companies would be expected to meet in getting a licence for oil exploration would be a benefits plan – this would ensure employment for Sri Lankans and enable Sri Lankan manufacturers and service providers to take part on a competitive basis to supply goods and services.” He added that they must be competitive, efficient and trained. How can that work? He conceded that there was a serious shortage of professionals to work in the field and that the industry needs to train a certified labour force. There are no petroleum professionals coming through the education system.

 

The number of local people employed after the construction phase of the Chad-Cameroon pipeline was negligible in Cameroon and around 350 in Chad. In Ecuador, 50,000 new jobs a month were promised; there have been only 9,000 new jobs so far, mostly unskilled and temporary.

 

De Silva gave the Sunday Observer an update in March 2011. He did not sound very positive to me: “with the available data it is not possible to estimate the amount of oil in the Mannar Basin confidently… At the beginning of the oil production process, the Sri Lankan Government’s share would be 15% and Cairn Lanka’s 85% … As the years go by, Sri Lanka’s share will increase to … 85% while Cairn Lanka’s share will come down to …15%”.

 

Oil and corruption

 

As long ago as 2004, Transparency International estimated that billions of dollars were lost to bribery in public purchasing and oil seemed to guarantee corruption. Oil-rich Saudi Arabia, Angola, Azerbaijan, Chad, Ecuador, Indonesia, Iran, Iraq, Kazakhstan, Libya, Nigeria, Russia, Sudan, Venezuela and Yemen were highly corrupt. Public contracting in the oil sector is plagued by vanishing revenues.

 
Inequality

 

Even if Sri Lanka’s oil exploration is successful, it is unlikely that many citizens will benefit. Venezuela is to some extent an exception in that government policy has been to use oil to improve the lot of the people as a whole. Even with Chavez’s reforms, problems persist and Caracas is one of the three most violent cities in the world.

 

Prof. Michael Ross of UCLA produced a chart mapping oil sales against literacy and malnutrition. Every 5% rise in oil exports was matched by a three-month fall in life-expectancy and a one-point rise in childhood malnutrition. Sri Lanka currently enjoys good WHO indicators, but child malnutrition figures are causing concern. This could get worse with the ‘benefits’ of oil.

 
Terrorism and environment

 

Spillages from sabotage sometimes occur. In Colombia and Nigeria, guerrillas persistently targeted pipelines. In 1995, the LTTE attacked CPC refinery and oil storage installations in Colombo causing several deaths and massive fires in the storage areas. Security fears undermine human rights. In more recent times the LTTE air force targeted oil installations.
The seismic vibrations generated by drilling can adversely affect buildings and the chemicals used can also deplete aquatic life in rivers and streams. Pollution can occur because of human error, sudden rupture of pipelines, or instrument failures.

 
Conclusion

 

So, does Sri Lanka want to be a nation where foreigners call the shots – a polluted nation, plagued by poverty and inequality; where corruption, dynastic elites and nepotism compromise good governance and erode human rights?

 

Does Sri Lanka deserve the blessing of oil?

Irish Elect Poet as President

This article was published in the Sri Lankan newspaper, The Nation, on October 30 2011

It has just been announced that Michael D Higgins, a beaming little leprechaun, endorsed by Martin Sheen, is the new President of the Republic of Ireland. Higgins is a poet who has been minister of culture.

 
The Uachtarán na hÉireann is not an executive presidency. Although it is mainly a ceremonial office strong, personalities have been able to use it cannily. Eamon de Valera used his freedom fighter status (and his newspaper empire) to maintain the totalitarian rule of the Catholic Church. Mary Robinson used her international reputation, mighty intellect and even mightier charm to nudge Ireland into the modern world.

 
Contenders have come and gone and come back again. At one time, there was speculation that Bob Geldof would put himself forward. In one of his more printable comments, the ex-Boomtown Rat spoke of boom and bust. “The overwhelming feeling I have is one of sadness for the country, and of anger for the incompetence beyond measure, the sheer stupidity and the clear venality which has Ireland where it is now”. Saint Bob early decided it was not worth running.

 

There was pressure on Martin Sheen to use his experience of pretending to be a president on The West Wing to have a go at running a real country. He has Irish citizenship as well as a Master’s in philosophy from the University of Galway.

 

Fianna Fáil, the party that has dominated Irish politics for decades, did not run an official candidate. But Sean Gallagher, although rejecting accusations that he embraced his Fianna Fáil past but denied the Fianna Fáil present, said on his own website: “Seán has been a sporadic member of Fianna Fáil over many years”. Gallagher was front-runner at the end of the campaign. Businessman Hugh Morgan alleged Mr Gallagher personally collected a “5,000 cheque from him on behalf of Fianna Fáil.

 

Rosemary Scallon (born Rosemary Brown in 1951 in Derry) achieved international fame as Dana, when she won the Eurovision Song Contest in 1970 with the song All Kinds of Everything. Squabbles over money from her US earnings peddling religious music have escalated into nastier accusations. Dana’s brother, John Brown, was a member of her election team. Dana’s sister, Susan, has accused Brown of sexually molesting her, Susan’s, daughter and is repeating the allegations now. Dana concealed the fact that she was a US citizen and therefore constitutionally barred from contesting for the presidency of Ireland.

 

The contest is open to natives of Northern Ireland even though they are UK citizens. Like Dana, Martin McGuinness is a native of Derry. (I once had dinner with Chris Patten and he told me he had got into hot water with the Reverend Ian Paisley for saying “Derry” instead of “Londonderry”). McGuinness has given up his job in the Stormont government in Belfast to run in the Republic’s presidential election. He is having to field a lot of criticism about his terrorist past as Commandant of the Derry brigade of the Provisional IRA. He claims that he left the IRA in 1974 but others dispute this. Government Chief Whip Paul Kehoe snarked at McGuinness’s commitment to draw the average industrial wage if elected. “Why would you need your salary when you have the proceeds of the Northern Bank at your disposal,” Kehoe said. The IRA stole £26.5 million from the Northern Bank in 2004.

 

My friend, the Reverend Harold Good, is not naive about the horrors of terrorism, but counts McGuinness as a friend following their partnership in the Northern Ireland peace process. Harold told me: “If elected he would be a circumspect, respectful and statesmanlike President… he would leave a gap in our Stormont administration where he is doing a very good job. The media and his opponents are indeed focussing on his past rather than his present. However, as I understand it … he and Sinn Fein see this as an opportunity to ask the Irish electorate to give a strong endorsement to the road they have taken … as distinct from the ‘dissidents’ . They feel a strong vote, whatever the outcome, will send this message.”

 

McGuinness made a less than helpful intervention in Sri Lankan affairs when he came here in 2006 and talked with LTTE leaders. He may have meant well but was over-optimistic in seeing parallels with the Irish situation. In Ireland, most parties were exhausted enough to give up conflict and to talk. “The reality is that, just as in Ireland, there can be no military victory and that the only alternative to endless conflict is dialogue, negotiations and accommodation”.

 

He was clearly mistaken.

 

McGuinness criticised the European Union for banning the Tamil Tigers as a Terrorist Organisation. He said that “it was a huge mistake for EU leaders to demonise the LTTE and the political leaders of the Tamil people.”

 

We knew well enough that some were demons.

 

Although it is possible to learn lessons from history, the road to hell is paved with false analogies.

 

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