Sri Lanka opens offshore oil and gas blocks to bidders

Sri Lanka has opened four offshore blocks in the Indian Ocean to international bidders for oil and gas exploration, development and commercial production, authorities announced on August 25.

The blocks cover about 34,000 square kilometres. Energy Minister Anura Karunathilaka said bidding would remain open until early next year.

Sri Lanka imports all its crude oil needs and has seen its fuel import bill increase as much as five-fold since the Middle East war began in February. The country has previously offered offshore blocks to India and China but had little commercial success.

Karunathilaka said deep-sea drilling technology had improved over the past decade and expressed hope that Sri Lanka could attract investors.

Neil de Silva, head of Sri Lanka’s Petroleum Development Authority, said prospective bidders would be given access to seismic, geological and geophysical data gathered over several decades. He said Sri Lanka’s “conservative estimate” of gas deposits was about nine trillion cubic feet and oil deposits about two billion barrels.

Cairn India drilled four wells between 2011 and 2013 through a local subsidiary and reported gas discoveries in two of them, but exited in 2015 after saying extraction from deposits about 4.3 kilometres beneath the seabed was not commercially viable.