Sri Lankan government signs agreement with Bell Geospace Ltd to explore offshore oil and gas deposits
The government of Sri Lanka has reportedly signed an agreement with Bell Geospace Ltd. to explore for offshore oil and gas deposits in the seas off north and northwest of the island.
Accordingly, Sri Lanka’s Minister of Highways and Petroleum Resources Development Kabir Hashim and General Manager of Bell Geospace John McFarlane have signed the agreement for the company to conduct Gravity and Magnetic Surveys over the sea coast of Sri Lanka to explore the mineral gas fields.
Reports on the event state that the agreement was signed for a project to carry out Airborne Gravity, Gravity Gradiometry and Magnetic Surveys over the sea coast of Sri Lanka and to explore the mineral gas fields said to be situated around the Cauvery Basin off the northern peninsula and the Mannar Basin off the northwest coast.
Bell Geospace is reportedly planning on using a technique which exploits magnetic anomalies in the earth’s magnetic field to search for petroleum and mineral deposits below the surface, which will enable faster detection of deposits and give more precise locations for drilling.
Minister Hashim has stated that the project with Bell Geospace aims to attract world-renowned oil companies as investors in oil exploration.
“We think we have the opportunity to find not just gas but also crude oil. Usually we have trouble getting money from the Treasury for explorations. If we enlighten the international community, some of the best institutions in the world will be interested. Companies like this are willing to do these studies and bear the expenses with the belief that other companies are looking to invest in Sri Lanka. Once they collect the data, they can sell the data from the surveys to other companies. We get 40% of that income as well. The agreement is advantageous for both sides,” the Minister has been quoted as saying.
Meanwhile, Sri Lanka’s Petroleum Resources Development Secretariat (PRDS) has identified several blocks for offshore oil exploration and the Government has called for international competitive bids for exploration and production of oil and natural gas in M1 and C1 blocks.
OSL take:
Exploration of offshore oil and gas is a new business/investment opportunity that is emerging in Sri Lanka. Given the financial constraints faced by the government of Sri Lanka in carrying out the exploration work, foreign companies engaged in the oil business could explore the possibility of entering an agreement with the Sri Lankan authorities to engage in the exploration of offshore oil and gas deposits. Also, once the exact locations of the deposits are identified, it would provide a lucrative business/investment opportunity for foreign businesses/investors.
| Article Code : | VBS/AT/19082019/Z_3 |