Sri Lanka plans to invite for oil exploration bids

Jul 01, 2004 02:00 AM

Sri Lanka plans to invite companies to bid for oil and gas exploration rights in the first quarter of 2005, said an official at the Ministry of Power & Energy.
"We feel more ground work needs to be done before calling for bids. The data available so far is not sufficient to start drilling operations," Titus Jayawardene, policy director at the ministry, told.

The government is making arrangements to conduct further studies into the country's oil and natural gas prospects, possibly in December, after the prevailing monsoon season, Jayawardene said. Industry officials say recent findings show small hydrocarbon reserves in the north-western Gulf of Mannar and Cauvery, which will ideally suit small- to medium-scale exploration and development firms.
Also, parliament passed a new Petroleum Resources Bill in July 2003 which will facilitate oil and gas exploration. The government hadn't pursued exploration prior to this bill.

Jayawardene said the government is also preparing terms and conditions and geological data ahead of the bidding round. The government has already advertised its exploration efforts to foreign firms at various international forums in recent months.
"We have got very positive feedback, mainly from big companies in the US, UK and China," Jayawardene said.

Overseas companies explored areas offshore Sri Lanka in the Palk Strait between the mid-1970s and mid-1980s, but failed to yield any oil and gas reserves. Deep-water areas, including the Mannar Basin, weren't explored because drilling technology at the time wasn't sophisticated enough and companies didn't consider deep-water exploration economically viable due to the price of oil at that time compared with current prices.
"If all goes well, we may be able to conduct test drilling in early 2006," added Jayawardene.

Source: Dow Jones
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