Sri Lanka offers two offshore oil blocks for exploration

ECONOMYNEXT – Sri Lanka has opened an international bidding round to explore and produce oil and natural gas in two blocks in the Mannar and Cauvery Basins, the Petroleum Resource Development Secretariat (PRDS) said.

The bids for the Mannar Basin’s M1 block and its northern neighbour, the Cauvery Basin’s C1 block, will close on July 15, PRDS said.

The M1 and C1 blocks cover 2,779 square kilometres and 2,246 square kilometres respectively.

A parliamentary report had said that there is high potential for oil and gas in the two blocks, based on petroleum system modeling analysis carried out by the PRDS and foreign geoscience experts.

A Chinese seismic vessel began surveying the Mannar Basin in October 2018.

The US firm Bell Geospace Ltd won a contract in February 2019 to survey the Mannar and Cauvery Basins for oil and gas deposits using gravity and magnetic techniques.

The Sri Lankan government even reached out to the Russian government to obtain Soviet Era seismic data for the Cauvery Basin in the lead up to the current bidding round.

The government had attempted to license the exploration and production rights for the two neighbouring blocks to a firm named Serendive Energy Pvt. Ltd in 2018 through a Swiss Challenge round.

M1’s southern neighbour, the M2 block, has gas deposits.

India’s Cairn discovered natural gas in the M2 block in 2011. It drilled four wells and found gas in two wells.

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The two wells are estimated to have two trillion cubic feet of natural gas and 10 million barrels of condensate, the PRDS has said.

Cairn abandoned the project during the 2015 oil boom. The rights to the block reverted to the Sri Lankan government.

The Mannar Basin alone has the potential to provide for Sri Lanka’s energy needs for 60 years, the PRDS has estimated.

Twelve international firms had shown interest in developing the M2 block, and a bidding round had started in January for re-licensing.

The bidding round would have ended on May 07, but the government extended the deadline by a month due to ongoing security concerns in Sri Lanka. (Colombo/May28/2019)

 

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