Page 13 - AsianOil Week 03 2023

AsianOil POLICY AsianOil

Sri Lanka makes new push to

launch oil exploration

SRI LANKA SRI Lanka is preparing to offer two-year oil and India and north-western Sri Lanka could hold
gas exploration licences for up to 900 offshore roughly $2bn of hydrocarbon resources, Sri Lan-
Launching domestic oil blocks to foreign companies in a push to boost ka’s former energy minister told Parliament two
production is a part of a investment, a top government official told Reu- years ago.
plan to expand foreign ters on January 12. It is hoped that exploration could kick off as
investment and reduce Launching domestic oil production is part early as March, and in the event of discoveries,
dependency on fuel of a plan by Sri Lankan President Ranil Wick- production-sharing agreements (PSAs) could
imports in the crippled remesinghe to expand foreign investment in be signed. There are already two companies that
economy. order to stabilise the country’s economy, which have expressed serious interest and requests for
is undergoing its worst crisis in decades. The proposals (RfPs) will be released soon, paving
government finalised new regulations this week the way for licence negotiations, according to
and has introduced a framework for companies Ovitigama. A source told Reuters that one of
to sign expressions of interest (EoIs) for explor- those companies is India’s ONGC Videsh Ltd
ing blocks around the country, according to (OVL).
Reuters. The rules governing oil exploration will Sri Lanka’s heavy dependence on fuel imports
become public this month, and the first licences has only exacerbated its economic woes, given
are expected to be issued within weeks. the soaring cost of energy globally. It paid around
“In the coming months, we expect to recom- $4.2bn for those imports last year, according to
mence oil and gas exploration with the first set Reuters.
of credible entities. We believe this will boost Past attempts to kick-start exploration have
investor confidence and serve to attract the new been unsuccessful. Sri Lanka held its first inter-
wave of EoIs this year,” Surath Ovitigama, direc- national licensing contest in 2007, with only one
tor-general of state-owned Petroleum Develop- exploration block being awarded to an Indian
ment Authority, told Reuters. firm that subsequently pulled out in 2015 in the
Sri Lanka’s previous efforts to establish oil pro- wake of the oil price crash. France’s TotalEner-
duction have focused on the area off the coun- gies and Norway’s Equinor signed up in 2019 to
try’s northern coast, but it has also researched search for commercial oil at two blocks but the
assets surrounding all sides of the island. The projects have made only limited progress.™
Mannar Basin that spans an area between south

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