Mar 15, 2012 (LBO) - Sri Lanka will auction shallow water blocks in the Mannar Basin to oil exploration companies soon following the discovery of gas by Cairn India in two of three test wells, an official said.
"The plan for the next three months or so is to launch an international licensing round for some of the remaining blocks," the island's Director General of Petroleum Resources Development Saliya Wickramasuriya said.
The shallow water blocks in the Mannar Basin, the ones closer to the coast, will be auctioned initially.
"We will not auction all of them at once. The deeper water ones, we will hold onto for the time being," Wickramasuriya told a forum on new business opportunities arising out of oil exploration in Sri Lanka held by the National Chamber of Commerce.
Cairn India, which was awarded one block in the first licensing round, found gas and condensate in the first two test wells drilled last year with the third being dry.
Cairn is now conducting more seismic surveys in preparation to drill a few more wells to properly define the reservoir potential ahead of commercial production.
Wickramasuriya said he expects better interest from oil firms in the next auction as obstacles like the 30-year ethnic war which ended in 2009 are not there and the economy is growing fast.
"There will be many companies willing to invest in Sri Lanka."
He said he expects at least 2 - 2.5 billion US dollars in investments in offshore oil exploration and drilling and production infrastructure in the next few years.