Sri Lanka mulls awarding oil exploration blocks on Swiss Challenge
ECONOMYNEXT – Sri Lanka is considering awarding at least two shallow water oil exploration blocks off the island’s north east coast on a ‘Swiss Challenge’ basis following a proposal by an interested investor.
Sri Lanka will also offer a deepwater block where a gas reserve has also been found earlier, in a competitive bidding round in May, Sri Lanka’s cabinet of ministers was told.
The exploration well drilled by Cairn Energy of India but not developed as oil prices fell amid a deflationary collapse in commodity prices. Sri Lanka’s attempts to interest investors have met with tepid interest in the past
The plan to offer nearby blocks on Swiss Challenge follows a proposal by a company called Serendive Energy, EconomyNext learns.
Under a ‘Swiss Challenge’ other companies will be given a chance to better terms offered by the first firm.
The two blocks, identified as C1 and M1 are located side by side but belong to different areas carved off for oil exploration, the Mannar Basin to the West, and Cauvery Basin that surrounds the Jaffna peninsula.
They are north of the M2 block where a gas reserve was found.
Sri Lanka attempts to get international oil firms to invest in exploration has been slow.