15 August 2016 12:00 am
By Supun Dias
Minister of Petroleum and Petroleum Gas Chandima Weerakkody said that a number of leading oil companies in the world have shown interest in exploring oil and gas in ultra-deep water blocks off the East coast of Sri Lanka.
To this end, the government has signed a two-year joint study agreement with French oil major Total.S.A. to explore two deep water blocks in the East coast.
Total.S.A. which is one of the seven ‘Supermajor’ oil companies in the world will invest USD 25 million during the period.
The agreement was signed between Minister Chandima Weerakkody and Total S.A.(Asia Pacific) President Olivier Cleret de Langavant.
The Environment Impact Assessment (EIA) is now underway. The joint study agreement is to explore oil and gas potential in the two selected blocks. The oil company bears most of the cost of exploration activities.
After the two years joint study period, Total S.A. will present the research findings to the government. If oil or gas is found in the blocks, the government and the company will enter into a petroleum resources agreement (PRA) on sharing the oil/gas production.
The Minister said that a Singaporean Company Bonavista has also expressed its willingness to embark on oil exploration work in Cauvery basin in Sri Lanka.
He said that he will get the Cabinet approval for them to start exploring within 2-3 months.