Sri Lanka to issue licenses to explore offshore petroleum blocks
The Sunday Morning: A Cabinet paper is slated to be presented to the Cabinet of Ministers, seeking approval for the granting of exploration licenses to interested foreign firms for up to 150 offshore blocks in the Mannar, Cauvery, and Lanka Basins, marking the country’s inaugural foray into petroleum exploration.
Speaking to The Sunday Morning Business, Petroleum Development Authority of Sri Lanka (PDASL) Chairman Saliya Wickramasuriya stated that the Ministry of Energy would be presenting the Cabinet paper for the granting of petroleum exploration licenses in the Mannar, Cauvery, and Lanka Basins.
Elaborating further, he stated: “There has been significant interest. We have received Expressions of Interest (EOIs) in relation to around 150 offshore blocks in the Mannar and Cauvery Basins, from a total of around 890 blocks.”
He noted that the regulations setting out the legal framework under which interested entities may enter into joint study agreements with the PDASL in relation to the exploration of the country’s offshore assets had been published earlier this year.
Recent studies of well data and regional studies indicate that the three offshore sedimentary basins located around the island – Mannar, Cauvery, and Lanka – possess a proven working petroleum system with substantial deposits of natural gas.
The first natural gas discovery was made in the Mannar Basin off the northwestern coast in 2011. So far, exploratory drilling has made two discoveries from the same block with estimated reservoir capacities in excess of one trillion cubic feet (TCF) of natural gas and 10 million BBL (barrels) of condensate.
These discoveries propelled further explorations in the Mannar Basin, both in onshore and offshore regions.
A National Policy on Natural Gas was gazette in September 2020, outlining domestic demand creation strategies and providing operators with options to commercialize offshore gas. A new Petroleum Resources Act No.21 of 2021 introduced independent regulation, policy, and operation functions and enhanced investor protection.
OSL take:
Sri Lanka’s petroleum industry has opened up new business/investment opportunities, especially in the oil exploration sector. The government of Sri Lanka has initiated the process of issuing licenses to interested investors. Given Sri Lanka’s strategic geographical positioning in the Indian Ocean and the incentives offered by the authorities, business/investment opportunities in the country’s oil exploration industry would guarantee lucrative returns. The country’s positioning in the South Asian region as well as its close proximity to international maritime lanes would be a further incentive to interested foreign businesses/investors.
| Article Code : | VBS/AT/20230707/Z_4 |