Discovery of offshore oil and gas augurs well for Sri Lanka
- Minister Premajayantha
By L.S. Ananda WEDAARACHCHCI
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Signing the Oil and Gas Exploration Agreement with CAIRN India
Ltd |
The discovery of offshore natural gas deposits in the Mannar basin
augurs well for the future of Sri Lanka, said Petroleum Industries
Minister Susil Premajayantha.
He said he was confident of the success of gas and oil exploration
activities carried out by Cairn Lanka Ltd.
President Mahinda Rajapaksa made a special announcement last Sunday
in Kandy that he had been informed by oil and gas explorers that they
had discovered a gas deposit in the Mannar basin seabed.
Minister Premajayantha said that Cairn India informed him immediately
after the discovery of natural gas in the Mannar seabed in terms of its
agreement with the Sri Lanka government.
”It will be a long scientific and technological process to confirm
the commercial viability of the natural gas deposits being harnessed.”
”High Calibre bidders could be attracted for the remaining blocks in
the Mannar basin. The discovery of gas in the first block drilling is a
positive sign for future bidders, he said.
the Minister said that Russian Petroleum and Gas giant GasProm
Chairman, came to Sri Lanka recently and held a series of discussions
with the Sri Lanka Government on investment opportunities in Sri Lanka.
GasProm may participate in oil and gas exploration activities in Sri
Lankan seas and negotiations to this effect are being held, the Minister
said.
India makes use of natural gas largely for domestic purposes such as
vehicle running, generating electricity and fertilizer production, he
said.
Cairn Lanka initiated drilling operations last August after a series
of seismic studies conducted during the last two years.
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We carry below a release
issued by the Indian Oil drilling company - Cairn India
Limited
“Cairn Lanka (Pvt) Limited,
a wholly owned subsidiary of Cairn India Limited, has
notified the appropriate authorities in the Government of
Sri Lanka of a gas discovery in the CLPL-Dorado-91H/1z well,
drilled in a water depth of 1,354m, located in the block SL
2007-01-001, Manner Basin, Sri Lanka. Cairn Lanka (Pvt)
Limited is the Operator and has a 100% participating
interest in the block.
A gross 25m hydrocarbon
column in a sandstone between the depths of 3043.8-3068.7m
MD has been interpreted from log and MDT data to be
predominantly gas bearing with some additional liquid
hydrocarbon potential. Further drilling will be required to
establish the commerciality of the discovery.
The CLPL-Dorado-91H/1z well
is the first well to be drilled in Sri Lanka in 30 years and
the first well to discover hydrocarbons in the country.”
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Minister Premajayantha said that the Government is optimistic that
the project will be commercially successful.
The Minister said that the global energy demand is increasing apace
and the discovery of natural gas will position Sri Lanka as an
attractive investment destination.
The energy focus is from nuclear energy to natural gas, the Minister
said.
He said that there are two more wells for drilling and it will
commence in the near future.
Cairn India Ltd. a UK subsidiary listed as Cairn Energy Plc said that
the natural gas found last week is Sri Lanka’s first confirmed hydro
carbon discovery. Further operation will eventually justify whether it
is commercially viable.
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Oil drilling ship |
Cairn India had been awarded the right to drill three oil wells in
Block 2 in the Mannar basin out of eight blocks in June, 2008. Sri Lanka
allocated M1 and M8 blocks to the governments of India and China. Cairn
India’s subsidiary.
Cairn Lanka had entered into an agreement with the Sri Lanka
government in July 2008 to explore oil and gas in the Block No.2 in the
Mannar Basin in an investment worth over 110 million dollars.
After the discovery of the gas deposit, Cairn India said.
”It struck a 25 metre hydrocarbon column showing primarily gas with
other liquid hydrocarbon potential in the CLPL Dorado – 91H/12 wildcat
well drilled at a water depth of 1354 metres” (4442 feet).
Since, Sri Lanka produces no oil it depends on imports which cost 3
billion in 2010 alone. Which was 40 percent more than in 2009, according
to Central Bank figures. Since the end of terrorism, the government has
launched offshore oil and gas exploration.
Although American and Russian companies explored the Canvery Basin,
off the Northern shore for oil in the 1960’s to 1980’s, only traces were
found. However, terrorist violence prevented exploration activities.
There are nearly 30 operating wells on the Indian side of the Cauvery
Basin in the Northern coast.
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Sri Lanka’s Oil exploration in nothern and
northwestern coast |
The Calgary based Bengal Energy Ltd has exploration rights for 1362
Sq. km there. Sri Lanka is however optimistic about the prospects of her
own oil potential.
In 2001, the CPC and TGSNOPEC signed an agreement to collect 1100 km
of 2D seismic data in the Mannar Basin.
The data was acquired in June – July 2001 and a detailed
interpretation report was produced by New South Global in 2002 under
contract to TGSNOPEC. The report highlighted the petroleum potential of
the Mannar Basin and encouraged TGSNOPEC to collect additional 4600 km
of seismic data in the basin in 2005. These two TGSNOPEC data
acquisitions caused exploration companies to show interest in oil
exploration here. |
