Sri Lanka Aims To Join Oil Producers’ Club In 2023

  • Aug 27, 2019
  • Investing

Sri Lanka, which doesn’t pump any oil at present, hopes to begin oil and natural gas production in 2023, a senior government official said on Tuesday.

Vajira Dassanayake, Director General of the Petroleum Resources Development Secretariat (PRDS) of Sri Lanka, said that the country also held a tender for one block and received three bids for exploration and development of that block in the Mannar Basin off the northwestern coast of Sri Lanka.

The government plans to award the block by November this year, the official said.

“Definitely by 2020 they will start operation and (we) expect the first hydrocarbon production by 2023,” Reuters quoted Dassanayake as saying.

The block was previously explored by Cairn Energy’s subsidiary Cairn India, which discovered natural gas in the Mannar basin back in 2011. Two years later Cairn was planning a second phase of exploration drilling after finding gas and condensate in two out of three wells drilled in the 2011 exploration phase. Cairn India, however, withdrew from the block in 2015 with the plunge in oil prices.

According to the government of Sri Lanka, seismic data shows there could be more than 1 billion barrels of oil under in the Mannar Basin.

Sri Lanka’s government also signed this week a two-year exploration deal with oil majors Total and Equinor to study the hydrocarbon potential in Sri Lanka’s waters.

Under a previous exploration agreement, Total has already surveyed 50,000 square kilometers (19,305 square miles) off Sri Lanka’s east coast. The new exploration agreement will include three participants—Total, the government of Sri Lanka, and Norway’s Equinor, which will take 30 percent in the new venture, Sri Lankan officials said.

Dassanayake said that after 30-40 years of hopes for hydrocarbon exploration in Sri Lanka, the country is now “really on the ground” with its plan to see oil and gas production flowing within the next five years.