51. Interpretation

In this Act unless the context otherwise requires -

“contiguous zone” means, the zone declared to be the

Contiguous Zone of Sri Lanka by Proclamation made under section 4 of the Maritime Zones Law, No. 22

of 1976;

“contractor” means, any person or body corporate, local or foreign, authorised to conduct petroleum operations under a Petroleum Resources Agreement which shall include joint study operations;

“exclusive economic zone” means, the Zone declared to be the Exclusive Economic Zone by Proclamation made under section 5 of the Maritime Zones Law,

No. 22 of 1976;

“fiscal stability” means, maintaining for both contractor and the State the same overall project economics as agreed mutually at the time of entering into a

Petroleum Resources Agreement by allowing the adjustment of any of the fiscal parameters in case of change of a government fiscal policy;

“historic waters” mean, the limits of the historic waters declared by Proclamation made under section 9 of the Maritime Zones Law, No. 22 of 1976;

“Joint Study Agreement” means, an Agreement entered into between the State and one or more contractors in terms of section 19 of the Act, to study and evaluate the hydrocarbon potential of a defined area;

“Minister” means, the Minister assigned the subject and functions relating to this Act under Article 44 and 45

of the Constitution;

“National Policy for the Upstream Petroleum Industry”

means, a policy which outlines the general principles, management, development and all other related aspects of the upstream petroleum sector by recognizing the challenges and providing the recommendations in order to monitor and guide the upstream industry by ensuring the right balance between the national interest of the State and the interests of the contractors or operators;

“non-material terms and conditions” mean, items that will not directly impact the evaluation results of the proposals;

“participating interest” means, the share of ownership or equity of a participant in any entity or a joint venture;

“petroleum data” means, geological, geophysical, geochemical, petrophysical, engineering, well logs, maps, magnetic tapes, cores, cuttings and production data as well as all interpretative and derivative data including reports, analyses, interpretations and evaluation prepared in respect of petroleum operations, economic data and geological samples including all information interpretation reports;

“petroleum operations” mean, activities in exploration, development and recovery of petroleum resources, including but not limited to geological surveys, interpretation of seismic data, well drilling, production testing, separation, processing, storage, recovery, transportation and marketing;

“petroleum reservoir” mean, a naturally occurring discrete accumulation of petroleum resources;

“petroleum resources” mean, crude oil, natural gas and hydrocarbons whether in natural liquid, gaseous, solid or semisolid state, hydrates of oil and gas, sulphur and other similar substances associated with hydrocarbons that are in site or recovered by petroleum operations;

“Petroleum Resources Agreement” means, a contract for production sharing entered into in terms of section 18 of this Act, between the State and one or more contractors;

“petroleum resources royalty” means, the royalty that is payable by a contractor on the market value of all petroleum resources that are recovered by him from the area covered by a Development Licence;

“territorial sea” means, the limits of the sea declared to be the territorial sea of Sri Lanka by proclamation made under section 2 of the Maritime Zones Law, No. 22

of 1976 and includes the internal waters of Sri Lanka;

“unit development” means, the development of a common reservoir that is situated within the boundaries of two or more exploration blocks or the area covered by two or more development licences;

“United Nations Convention on the Law of the Sea”

means, the United Nations Convention on the Law of the Sea adopted in 1992 in Montego Bay, Jamaica, entered into force on November 16, 1994 and ratified by Sri Lanka on July 19, 1994; and

“upstream” means, the operational stages in the oil and gas industry that involve exploration and development and deal with a contractor initially taking steps to locate, drill, test and produce oil and gas.