Energy committee clears the order governing petroleum exploration bids, two months after it was gazetted

A parliamentary committee has approved the legal instrument that governs how companies bid to explore for and develop petroleum in Sri Lanka, the Daily Mirror reported on Thursday.

The Ministerial Consultative Committee on Energy Affairs, chaired by Energy Minister Anura Karunathilaka, cleared the Order at a meeting held at Parliament.

What the Order does

The Order was issued by the Minister of Energy under Section 48 of the Petroleum Resources Act, No. 21 of 2021, read with Section 17 of the same Act, and was approved by the Cabinet of Ministers. It was published in Extraordinary Gazette No. 2497/37 of 16 July 2026.

Its operative requirement is straightforward: anyone seeking to explore or develop petroleum resources in one or more of the identified blocks must submit an investment proposal, together with the administrative fee specified in the relevant invitation for bids.

The sequencing is unusual

The Order was gazetted on 16 July. Sri Lanka launched its licensing round on 25 August, formally offering four Mannar Basin blocks — ranging from 5,689 to 11,728 square kilometres — to international energy companies. The consultative committee’s approval came on Thursday, roughly two months after the gazette and three weeks after the blocks went on offer.

Ministerial consultative committees are oversight and consultation bodies rather than the source of legal authority: the Order took effect on gazetting under powers the Act already confers on the Minister, with Cabinet approval behind it. The committee’s clearance is therefore a scrutiny step recorded after the fact, not a precondition that was holding the bidding round up. The Daily Mirror’s report does not make that distinction, and its headline — “Parliamentary Committee approves petroleum exploration bidding process” — reads as though the process could not have proceeded without it.

Update: EconomyNext corroborates, and supplies the history

EconomyNext reported the same approval on Thursday evening, attributing it — as the Daily Mirror did not — to a statement issued by Parliament. Its wording of the operative requirement matches the Daily Mirror’s exactly: anyone seeking to explore or develop petroleum in one or more identified blocks must submit an investment proposal together with the administrative fee specified in the relevant invitation for bids.

It also calls this “the first attempt under the Anura Kumara Dissanayake government to explore oil and gas in the area,” and places the current round against six decades of largely unsuccessful attempts.

The resource estimates

Two figures circulate, and they are not of the same quality. A former energy minister told Parliament in 2021 that the Mannar Basin, which lies between southern India and north-western Sri Lanka, may hold around US$260 billion worth of oil and gas. Separately, seismic surveys led previous governments to estimate that a 30,000 square kilometre area off the north coast holds over one million barrels of oil resources.

Both are pre-drilling estimates repeated from earlier governments rather than independently confirmed reserves, and the US$260 billion figure is a parliamentary statement from five years ago, not a survey result.

Why the earlier attempt failed

The reason the current round is described as a “fresh attempt” is a specific commercial failure. Sri Lanka’s offshore exploration began in the late 1960s in shallow areas of the Gulf of Mannar and the Cauvery Basin, with limited technical success until 2011, when Cairn Lanka — then a subsidiary of Cairn India — found significant natural gas accumulations in two deep-water Mannar Basin wells, establishing commercially viable gas and condensate deposits.

Production never followed. EconomyNext attributes that to the complexity of deep-water extraction, the absence of domestic natural gas infrastructure and shifts in global energy markets. Cairn exited the block in 2015.

That is the gap the present framework was built to close: Sri Lanka enacted the Petroleum Resources Act of 2021 — the statute under which Thursday’s Order was issued — and established the Petroleum Development Authority of Sri Lanka (PDASL) to manage exploration rights and maintain offshore acreage block maps, then introduced joint-study regulations and new licensing frameworks. The stated aim is to attract international operators across three prospective sedimentary basins: Mannar, Cauvery and Lanka.

Not reported

The Daily Mirror does not say when the meeting was held, describing it only as “recently” — so the approval cannot be dated more precisely than the filing. Neither outlet names the blocks the Order identifies or confirms they are the four Mannar Basin blocks already advertised, and neither records whether any committee member objected, what MPs asked, or whether environmental and revenue-sharing terms were discussed.

The two figures that would make the round concrete are still missing from both accounts: the administrative fee payable with a proposal, and the closing date for bids. Neither outlet gives either, and neither says how many companies have expressed interest. Those gaps have now survived the August licensing-round coverage and two separate filings on the Order itself.