ECONOMYNEXT - Sri Lanka has signed an agreement with a subsidiary of U.S. oilfield services firm Schlumberger for offshore seismic studies to assess prospects for oil and gas resources.
The deal will enable Total to go ahead with physical exploration work of the JS5 & JS6 blocks off the east coast, said Vajira Dassanayake, the director general at Petroleum Resources Development Secretariat (PRDS).
The French oil and gas major has a joint study agreement for the blocks signed with Sri Lanka in 2016.
“The physical work by Total happens after the execution of this agreement,” Dassanayake told a news conference after the deal with Eastern Echo DMCC, subsidiary of Schlumberger, was signed.
Acquisition of new seismic data will give a better understanding of the prospectivity of the offshore areas, said Phil Davey, vice president, Eastern Hemisphere, of WesternGeco, the Schlumberger business unit which controls Eastern Echo, which operates seismic survey ships.
“Understanding the geology will certainly improve the chances of finding oil and gas,” Davey said.
“There’s some geology that’s interesting with indications there might be a working petroleum system. It’s only after we start acquiring 2D seismic data we can start to build a picture of what the volumes (of oil and gas) might be, if there are any volumes.”
Minister of Petroleum Resources Development Arjuna Ranatunga said the deal with Eastern Echo DMCC is for 10 years at no cost to government with the firm committed to spending at least US$50 million on exploration.
“The government will own the data – we can sell the data,” Ranatunga told a news conference.
Eastern Eco DMCC can recover its costs from proceeds of selling data to multiple investors.
Eric Dussaud, exploration manager for Sri Lanka of Total, told Economynext.com the seismic surveys will start in August.
“That’s only the first step. Then there’ll be data processing by WesternGeco followed by the interpretation of the data by Total.”
A government statement said the main aim of the new agreement is to acquire more petroleum data using modern acquisition and processing techniques.
It will “reduce the technical and financial risk of prospective investors in deep water exploration in Sri Lanka and encourage increased level of investor participation in oil and gas exploration activities,” it said.
(COLOMBO, May 30, 2018)