Total signs deal to hunt for oil off Sri Lankaâ€™s east coast
ECONOMYNEXT – French oil major Total has signed a deal with Sri Lanka to explore two ultra deep water blocks off the island’s east coast, minister of petroleum resources development Chandima Weerakkody said.
“Total has already designed the survey and the environmental impact assessment is underway,” he told a news conference.
“Now the gates are open. A top company has walked into Sri Lanka and everyone’s eyes are now on us.”
The aim of the joint study is to explore marginal areas with limited data for hydrocarbon prospectivity, a ministry statement said.
Total will do this by conducting geological, geophysical and technical surveys, analysing and interpreting the acquired data, and ultimately assessing the presence of commercially viable oil and gas.
The main benefit to Sri Lanka will be the acquisition of seismic and other data in areas that currently have none allowing the government to assess future production potential at no cost, the statement said.
Sri Lanka will get a ground rental of one US dollar per square kilometre for the entire acreage of the joint study area valued at about seven million rupees a year.
Weerakkody said Total will invest about 25 million US dollars over the two year study period .
“If they find oil or gas we will hold talks with Total and come to a production sharing agreement.”