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After talks with President Mahinda Rajapaksa:
Gazprom to support Lanka’s oil quest
by Shanika SRIYANANDA
 Russia’s biggest energy company Gazprom, one of the world’s largest
natural gas extractors, has agreed to support Sri Lanka in oil
exploration off the Mannar coast and also to enhance facilities in oil
refineries.
Gazprom Chairman Alexei Miller announced the company’s willingness to
carry out oil exploration in the Mannar Basin when he met President
Mahinda Rajapaksa at a meeting held at the St. Petersburg International
Economic Forum, Presidential media sources said.
Sri Lanka has eight oil and gas exploration blocks in the Mannar
basin, estimated to contain deposits of one billion barrels of oil.
Cairn Lanka, a subsidiary of an Indian company is already exploring for
oil in the area.
Miller said the company would send a group of experts to Sri Lanka
for a feasibility study on oil exploration. Gazprom, which was formed in
1989, is involved in geological exploration, production, transportation,
storage, processing and marketing of hydrocarbons. It is also engaged in
generation and marketing of heat and electric power.
Gazprom is to explore the possibility of promoting LNG (Liquid
Natural Gas), which is cheaper than thermal and hydro-based power
generation, in Sri Lanka.
He said the Gazprom expert team would also look into this matter. The
company is renowned for supplying natural gas to Russia.
The company accounted for 10 percent of Russia’s Gross Domestic
Production in 2008, producing 549.7 billion cubic metres (BCM) of
natural gas, amounting to 17 percent of the world gas production. In
addition, the company produced 32 million tons of oil and 10.9 million
tons of gas condensate.
Miller has also assured to set up an oil refinery in Sri Lanka at the
discussion.
This is not the first time that Russia has helped in Sri Lanka’s
attempts at striking oil. The then Soviet Union recorded 4,837 km of
marine seismic data from 1972 to 1975 along with some onshore data to
evaluate the Palk Bay area in the Cauvery Basin under an agreement with
the Sri Lankan government.
Sri Lanka, which produces no crude oil at present, imports crude oil,
spending around US$ 700 million a year.
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