Sri Lanka will soon tender for oil exploration in five blocks in the northwestern offshore Mannar Basin after Cairn India Ltd. discovered a gas deposit there, the country's petroleum minister said today.
Cairn India, a subsidiary of London-listed Cairn Energy Plc, confirmed on Sunday the first discovery of the natural gas in Sri Lanka, but has yet to establish a commercial production schedule.
"We will call tenders soon for the five blocks. It will be in couple of months," Petroleum Industries Minister Susil Premajayantha told Reuters.
Premajayantha on Tuesday said the country will take 18 to 24 months to reach commercial production of natural gas in the Mannar Basin offshore.
In July, Cairn said it would take about two years to assess how much oil or gas there may be in the area, and if there is oil, it will take a minimum of six years to start commercial production.
Cairn has drilled one well out of the three it had planned.
Sri Lanka's government has said seismic data shows the potential for more than 1 billion barrels of oil under the sea in a 30,000 sq km area of the Mannar Basin.
In the early 1970s, Sri Lanka drilled seven wells in the Mannar region but found no oil.
Sri Lanka produces no oil and is dependent on imports, which cost it $3 billion in 2010. Since the end of a 25-year war with separatists Tamil Tiger rebels two years ago, the government has tried to reinvigorate oil and gas exploration.
Political analysts say successive governments have attempted to gain political mileage by saying that the country would produce oil commercially soon since the late 1960s, though no oil has been produced up to date. (Source: Reuters)