The Sri Lankan Government has decided to invite India and China to explore for oil in two of the seven blocks up for exploration along its sea belt. It is for the first time that Colombo is opening up the oil sector to foreign companies.
Transport and Petroleum Resources Development Minister A. H. M. Fowzie told The Hindu that the Sri Lanka Cabinet on July 5 approved a proposal to invite New Delhi and Beijing on `nomination' for oil exploration in two blocks.
It means that India and China are guaranteed a block each and will not be required to go through the tender process for the identified blocks. "It is a recognition of our special relationship with the two countries. We will soon be communicating the decision officially,'' the Minister said.
As for the other five blocks, global tenders will be invited and Indian firms will be eligible to take part in the process. According to Mr. Fowzie, petroleum giants from all over the world have evinced interest in the energy sector opportunities in Sri Lanka.
He said surveys had revealed that Sri Lanka had gas and petroleum reserves for 20 years and one billion barrels of petrol could be explored. The Gulf of Mannar had been identified for carrying out the first phase of oil exploration scheduled to commence in August 2007.
According to the Minister, the bidding process for the remaining blocks will commence shortly and will be open until December.
The bids will be evaluated in January 2007 and the successful bidder will be announced by March.
The Minister said that Sri Lanka would continue conducting seismic surveys to identify more oil deposits along the sea belt from Puttalam to Hambantota.
Independent observers are of the view that the claims made by the Sri Lanka Government on the energy potential in the seven blocks are yet to be fully established.
"So far only two phases of the seismic surveys have been conducted. The third survey has been put on hold. In the absence of a third survey, it is difficult to arrive at any conclusion on the oil potential along the Lanka sea belt,'' an economist said.
Transport and Petroleum Resources Development Minister A. H. M. Fowzie told The Hindu that the Sri Lanka Cabinet on July 5 approved a proposal to invite New Delhi and Beijing on `nomination' for oil exploration in two blocks.
It means that India and China are guaranteed a block each and will not be required to go through the tender process for the identified blocks. "It is a recognition of our special relationship with the two countries. We will soon be communicating the decision officially,'' the Minister said.
As for the other five blocks, global tenders will be invited and Indian firms will be eligible to take part in the process. According to Mr. Fowzie, petroleum giants from all over the world have evinced interest in the energy sector opportunities in Sri Lanka.
He said surveys had revealed that Sri Lanka had gas and petroleum reserves for 20 years and one billion barrels of petrol could be explored. The Gulf of Mannar had been identified for carrying out the first phase of oil exploration scheduled to commence in August 2007.
According to the Minister, the bidding process for the remaining blocks will commence shortly and will be open until December.
The bids will be evaluated in January 2007 and the successful bidder will be announced by March.
The Minister said that Sri Lanka would continue conducting seismic surveys to identify more oil deposits along the sea belt from Puttalam to Hambantota.
Independent observers are of the view that the claims made by the Sri Lanka Government on the energy potential in the seven blocks are yet to be fully established.
"So far only two phases of the seismic surveys have been conducted. The third survey has been put on hold. In the absence of a third survey, it is difficult to arrive at any conclusion on the oil potential along the Lanka sea belt,'' an economist said.
A positive for drill rig landlords as it will increase the need for platforms.
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