ECONOMYNEXT- Sri Lanka’s Petroleum Resource Development Secretariat (PRDS) is currently evaluating bids for exploring and production of three offshore gas and oil blocks, and the tenders would be awarded before the end of the year, an official said.
Three bids have been received for the licensing round for the M2 block in the Mannar Basin off Sri Lanka’s West coast, where gas deposits had been discovered in the past.
“Earlier this year, we went into the market to look for investors for the M2 block,” Director General Vajira Dassanayake said.
“It was supposed to close in May, but then the bombs went up and we had to extend it up to June and we got three proposals for the M2 block,” he said.
“The project committee is in the process of evaluating them.”
“We are hoping to submit our final report by the first week of September and hopefully before the end of this year, we will be able to award it to the successful party.”
Dassanayake said that the they expect the bidding companies to have a development plan by end-2019 which will then enable the winner to produce the country’s first hydrocarbons by 2023.
Meanwhile, only one bid was received for the second licensing round of 2019 for both the M1 block and the adjoining C1 block.
The tender deadline was in July.
“We went in the market for M1 and C1 blocks, because we had some investor interest,” Dassanayake said.
“After advertising, there was one proposal received for both blocks, which is also being evaluated.”
Dassnayake said that the single proposal for the two blocks came from a local company with both North and South American expertise.
India’s Cairn had discovered natural gas in two of the four wells it had drilled in the M2 block spending 240 million US dollars in 2011 after winning a bidding round in 2007.
Cairn had abandoned the M2 block during the 2015 shale oil boom, when the firm decided to exit all international ventures to focus on its main oil fields in Rajastan.
The two wells are estimated to have two trillion cubic feet of natural gas and 10 million barrels of condensate, and twelve international firms had shown interest in bidding for the M2 block, PRDS has said in early 2019.
The M2 block tender round of 2019 is to both produce gas from the two wells and to explore the remainder of the block.
Gas production in the block from the discovered deposits would require nearly a billion US dollars in investments, according to PRDS estimates in the past.
PRDS has said that the 9 blocks in the Mannar Basin alone could have the potential of an additional 5 billion barrels of oil and 9 trillion cubic feet of natural gas which would be sufficient for Sri Lanka’s energy needs for the next 60 years.