Sri Lanka will invite bids from international companies later this month for upstream petroleum development in four blocks of the Mannar Basin, the Daily Mirror reported on Saturday.
The tender covers exploration and extraction of both oil and natural gas. The newspaper said the process had been in the planning stage for a long time but did not proceed because of a court case, and that a source told it all legal impediments have now been cleared for the tender to be called.
Consultancy appointed to run the process
The government earlier invited tenders to select a consultancy firm with the expertise to manage the international bidding process for upstream petroleum development.
A 2021 release from the Parliamentary Media Unit put the value of oil and gas resources in the Mannar Basin at around US$267 billion. Cairn Lanka Limited, a subsidiary of an Indian firm, drilled two exploration wells in the basin in 2011 and discovered natural gas in the Barracuda and Dorado fields.
Regulatory groundwork already laid
Sri Lanka gazetted a national policy on natural gas in September 2020 setting out strategies to create domestic demand and giving operators options to commercialise offshore gas. The Petroleum Resources Act No. 21 of 2021 followed, establishing the framework to regulate exploration and production.
Regional push for offshore reserves
The Daily Mirror noted that tension in West Asia has prompted countries across South and Southeast Asia to step up offshore exploration. India’s Union Cabinet, meeting under Prime Minister Narendra Modi, approved a national offshore exploration scheme known as Samudra Manthan with a budget of US$8.83 billion through the 2030-31 financial year. Bangladesh has also invited bids from international companies for oil and gas exploration.
No date has been announced for the opening of bids, and the report did not name the blocks to be offered.