Sri Lanka: permits to be granted for Mannar Basin

Sri Lanka: permits to be granted for Mannar Basin

Elisa Maria Giannetto
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In a move toward energy independence, Sri Lanka takes steps to make the most of the Indian Ocean's recently discovered wealth of natural gas deposits

Sri Lanka has reopened its tender of permits to develop natural gas deposits discovered in recent explorations of the Indian Ocean’s Mannar Basin. The block being tendered is SL 2007-01-001, 2,924 sq km of open sea northwest of Sri Lanka. Permission to develop the block had been granted to Cairn India in 2008, which discovered the Dorado and Barracuda gas-condensate deposits following explorations in 2013. However, the company ceased operations in Sri Lanka when oil prices plunged. Petroleum Resource Development Secretariat (PRDS) announced on its website, "The block will be offered for licensing this year, including the Barracuda and Dorado gas-condensate discoveries." It also said the remaining blocks off Sri Lankan shores will be released via a bidding round in the fourth quarter of this year. In the meantime, the government is planning to divulge the opportunities offered by the new discoveries in a roadshow during the month of March that will make stops in Houston and London. Following the first natural gas discovery by Cairn Lanka, a subsidiary of the oil & gas company Cairn India Ltd., which in August began drilling in one of the eight blocks in the area, today the prospects are looking even more promising. The Mannar Basin has eight oil & gas exploration blocks, two of which have been licensed to India, while the rights to the remaining six were sold to China in 2007. Government estimates are as high as 1 billion bpd of oil, and for a nation entirely dependent on imports, the new licensing represents an important step toward energy independence.