60% probability of oil exploration in Mannar basin

by Gamini WARUSHAMANA

[email protected]
 

The probability of success in the exploration of Hydro Carbon (HC) in the Mannar basin is an high as 60% and by 2013-2014, we will able to produce Sri Lankan oil, the Secretary General of the Petroleum Resource Development Secretariat Dr. Neil De Silva said.

Dr. Silva was addressing a seminar on the present Status of Petroleum Exploration in Sri Lanka organised by the Sri Lanka Foundation Institute last week.

According to estimates world oil reserves is around 1209.5 barrels. This is the amount that can be produced with current technology and current economic conditions. Most of the reserves are in the Middle East region. The discovery of oil reserves in the Asia Pacific region is not significantly high. However, new discoveries have replaced reserves, he said.

Dr. De Silva said that many countries in the South East Asia region have discovered petroleum (oil and gas). As some of our neighbouring countries have discovered petroleum we also have a high probability of having petroleum. The history of oil exploration in Sri Lanka goes back 50 years. Oil exploration in Sri Lanka started in 1957-58 and there was a boost in exploration in 1970s. During the 1980s there was a slow down in exploration activities. In 1984 Petro Canada started exploration in the Mannar basin. The new chapter of oil exploration started in 2001 and TGS Nopec started seismic surveys in the Mannar basin. Our exploration in the 1970s failed not because we did not have petroleum but because we did not have the technology. Today we have the technology.

Oil exploration is a risky venture and if 40 wells are drilled the chance of having oil is only in two of them. Offshore exploration in deep water is much costly.

We have decided to explore 3,000 square km area in the Mannar basin and the area has been divided into eight blocks. The extreme North block was given to India and the extreme South block was given to China. We called for bids for blocks 1,2 and 3 after advertising and road shows in many countries and we received a fairly good response. However, our blocks are too small compared to the blocks offered by India in the Cauvery basin.

During the period, Angola and Mexico offered hundreds of blocks for bidding and therefore there was competition.

We received three bids for block 1 and one bid each for block 2 and 3. The cabinet decided to evaluate bids received for block 1 and Cairn India won the bid.

The local company Cairn Sri Lanka was set up to carry out the exploration and in October we issued an exploration licence to the company. The Company has called for tenders for 2D seismic surveys and exploration will commence in January, he said.