World eyes Lankan oil exploration

By L.S. Ananda WEDAARACHCHI

Skimmer pump operation

International E and P companies (Exploration and Production) have shown keen interest in the exploration work at the Mannar Basin due to the discovery of gas with liquid hydrocarbon by Cairn Lanka said Petroleum Resources Development Secretariat (PRDS) Director General, Saliya Wickramasooriya in an interview with the Sunday Observer

Excerpts of the interview:

Q: Wet gas has been discovered in the two oil wells drilled between July and October. What are the lab results of the laboratory tests?

A: A set of gas sample from the second well was sent for laboratory test last week and the report is expected shortly. The laboratory tests take time due to complex procedures and we expect the results in the next few weeks. "Predominantly gas bearing with some additional liquid hydrocarbon potential", is the best description we have at the moment for samples from both wells.

Q: What is the progress of the exploration work by Cairn?

A: Work is in progress in keeping with the agreement between Cairn and the Sri Lanka government. Results so far are encouraging, and we are now in discussions pertaining to increasing their scope of work.

Q: Interest in the Mannar Basin is growing steadily after the discovery of gas. What are the countries or companies that have shown interest in Sri Lanka's oil exploration work?

Derrick of the drill ship

Casing running activity on the drill flow

A: ONGC, Gasprom, chevron and Total are companies that have shown varying degrees of interest in Sri Lankan Petroleum exploration.

A Sri Lankan delegation headed by Petroleum Industries minister Susil Premajayantha recently held a series of discussions with Gasprom in Moscow, as a follow up to which a technical team arrived in Sri Lanka last week. This team spent the past five days studying data at the PRDs and will be returning to Moscow to submit the report.

Q: What are the results of the Gasprom team's visit?

A: The technical team concluded preliminary studies and will submit their report and recommendations to the head quarters in Moscow next week.

Initial inductions are positive in terms of Mannar Basin prospects.

The Vietnam government has also signed a memorandum of Understanding (MoU) with the Sri Lankan government on oil exploration.

The Ukrainian government too has shown interest in oil exploration in Sri Lanka having visited the PRDs earlier this year.

A highlevel team from OVL - the international arm of ONGC was also scheduled to visit last week but postponed their trip due to the unavailability of a member of their team.

Q: Cairn had advertised last month for international providers to supply 3D marine seismic data. What is the next stage of the exploration work?

A: There are three phases commencing from 2008 July as per the agreement between Cairn and the Sri Lanka government which is valid for eight years. Three oil wells will be drilled under phase one and the fourth and fifth in the phase two and three.

Cairn has been given the licence to explore oil and gas in block SL2007-01-001 in the Mannar Basin. The advertisement for the supply of 3D marine seismic data and gravity magnetic data is an indication that Cairn is preparing to commence work on second phase of the project.

Oil exploration is highly capital intensive and one well may cost between US$ 30-50 million and Cairn would have invested over US$ 150 million in exploration activities at the end of the first phase.

Q: Could you give a brief account of what Hydro Carban is?

A: The two elements, hydrogen and carbon constitute hydrocarbon, Hydrogen and Carbon have a strong mutual attraction and therefore form many compounds together.

The oil industry processes and refines hydrocarbons such as natural gas and crude hydrocarbons that occur in traps thousands of meters below the ground.

Q: What are your plans to market other blocks?

A: Our marketing strategy win centre around maintaining the momentum of Sri Lanka's oil exploration activities and ensuring that we take the best decisions in the short, medium and long term.

These decisions include what acreage to bid when and the selection criteria of future operators.

At this stage of our development the success of exploration activities all depend on the skills and experiences of our partners hence the selection should be done with great care.