Sri Lanka to sign deal for offshore oil joint study with Norway’s Equinor
ECONOMYNEXT- The Sri Lankan government will sign an agreement on August 27 with Norwegian energy firm Equinor to survey the offshore blocks JS5 and JS6 in the Lanka basin for oil and gas deposits, an official said.
“Next week we are going to sign another agreement,” Petroeum Resource Development Secretariat (PRDS) Director General Vajira Dassanayake said.
“Currently, we have a joint study agreement with Total and the government of Sri Lanka,” he said.
“JS 5 and JS 6 blocks are large when compared to other blocks, and that is why we are partnering with Equinor,” he said.
“They will be a part of a consortium led by Total. Equinor will have a 30 percent participating interest.”
Dassanayake also said that it will not be a tripartite agreement.
Total will sign as the project leader, and a deed certificate will be issued to Equinor by the Sri Lankan government.
The two blocks off Sri Lanka’s east and north east are in deep-water, making oil discovery costly.
Dassanayake said that the risks will be divided between the two companies.
“There will be more budgets every year. Maybe next year, they can shoot 3D seismic data and drill some wells. Our exploration activities in these two blocks will be expedited,” he said.
“These two companies have the best technology when dealing with ultra-deep water.”
Sri Lanka has discovered gas deposits in the Mannar basin off the country’s north western coast, which has the potential to provide for Sri Lanka’s energy needs for the next 60 years, according to PRDS estimates.