By Uditha Jayasinghe
The Government is planning to upgrade its petroleum laws to meet international standards after beginning oil exploration with an Indian company, an official said on Thursday.
Cabinet gave approval to amend the Petroleum Resources Act, in line with international practices. Cabinet Spokesman and Media Minister Keheliya Rambukwella told media that the decision was mainly due to the Government encouraging oil exploration through international companies off the north western shore of Sri Lanka.
Cairn India, which is currently exploring for oil reserves, is to start drilling of the fourth well in the Mannar basin in February.
Cairn said post acquisition and interpretation of 600 sq km 3D seismic data during phase 2 exploration period in Block SL 2007-01-001, exploration drilling was planned by mid-2013.
“However, due to early rig availability and excellent logistical preparations, the spud date is now advanced by a quarter. The preparation for drilling activity is now complete with a rig being secured from Transocean. Drilling of an exploration well is planned in February 2013,” Cairn said in its commentary accompanying third quarter results for financial year 2012.
Cairn has already announced gas deposit finds in two wells in 2011 but have yet to decide the financial viability of its Sri Lankan operations, which is likely to take place after the results of the fourth well are seen.
Cairn has rights to drill in one of eight blocks in the Mannar Basin. China and India have been offered one each, which they have yet to accept, while the remaining five are expected to be tendered after Cairn’s exploration campaign is completed.
Vietnam and Sri Lanka also signed a deal on oil exploration in October last year. Russia’s Gazprom and Malaysia’s Petronas are two other companies that have expressed interest in Sri Lanka’s oil prospects.
Sri Lanka has no oil reserves of its own and spends over US$ 4 billion a year on imports.
After the end of a three-decade war in 2009, Sri Lanka’s Government opened up oil and gas exploration in the Mannar basin.