Cairn to start drilling for oil in Sri Lanka in July

Saturday, 12 March 2011 00:56 - - {{hitsCtrl.values.hits}}

AFP: Cairn India, a unit of British exploration firm Cairn Energy Plc, said Friday it plans to drill for oil and natural gas deposits off Sri Lanka’s northwestern coast in July.

In 2008, Cain invested $ 100 million, spread over three years, to conduct detailed seismic studies and drilling three wells off the coast of Mannar.

“Frontier exploration drilling in Sri Lanka is planned to commence in July,” a company statement said. “Logistical preparations and detailed studies are ongoing ahead of drilling later this year.” Sri Lanka, which imports all of its oil needs, offered three blocks to investors after surveys showed deposits along the Gulf of Mannar, close to neighbouring India.

Block two, an area that covers around 3,400 square kilometres (1,300 square miles) off Mannar, was offered to Cairn in June 2008.

Sri Lanka allocated the two other blocks to the Governments of India and China.

The island spent $ 3.0 billion in 2010 importing oil, which was 40 per cent more than 2009, according to Central Bank figures.

Decades ago, overseas companies explored areas off Sri Lanka’s northwest coast, but failed to find any oil and gas reserves worth exploiting commercially.