Oil exploration to commence in Q1

Central Bank has stressed the importance of continuing oil exploration in the Mannar basin despite the recent dip in international oil prices.

‘Cairns Lanka Ltd, the local subsidiary of Cairns India Ltd is to commence exploration activities during the first quarter of 2009,’ bank’s 2008 Annual Report stated.

The report added that progress was made in respect of oil exploration in the Mannar Basin in 2008.

‘The Ministry of Petroleum and Petroleum Resources Development, called for bids from international oil companies for petroleum exploration in Blocks 2, 3 and 4 in the Mannar basin. Cairns India Ltd was selected as the successful tenderer and has been offered the licence for exploring oil in Block 2,’ the report stated.

The oil exploration project has been categorised into three phases. Phase one of the project has commenced in a 3300 km 2 area in the Mannar basin. It is learnt that it would take at least four years to obtain the first barrel of oil.

The programme of work will be in the block SL 2007-01-001 which is offshore North West Sri Lanka and covers approximately 3,000 square kilometres (km2) in water depths of 200 metres to 1800 metres in the Mannar basin.

Earlier in September 2008, the Board of Investment (BOI) and Cairn Lanka (Private) Ltd, a wholly owned subsidiary of Cairn India, signed an agreement for a commitment of an initial investment of more than US$110 million towards the exploration of hydrocarbons. (AR)

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