Govt. calls investors for $ 48m east coast oil search

Friday, 16 September 2016 00:01 -     - {{hitsCtrl.values.hits}}

By Chamodi Gunawardana

Petroleum Resources Development Minister Chandima Weerakkody yesterday invited investors, preferably local companies, to consider a $ 48 million fuel oil exploration project to be opened up along Sri Lanka’s east coast.

Speaking at a Sri Lanka Freedom Party (SLFP) weekly media briefing, Weerakkody said Cabinet, this week, approved giving an exploration contract to Singapore-based company Bonavista Energy to explore potential deposits of petroleum and gas on the east coast. The local partner is expected to fund the exploration study.

“After a three-year delay of bid rounds to select a technical assistant for oil exploration, a technical committee comprised of ministerial secretaries recommended Bonavista as the ideal technical partner,” he said. 

“Then the Cabinet on Wednesday approved the proposal made by the ministry to offer the oil exploration contract to Bonavista.”

Bonavista Energy of Singapore has only been in operation since 2013 and is a limited private company with little available financial information.

However, it did bid for two blocks in the Mannar basin in 2013 along with Indian oil company Cairn, which subsequently pulled out after their gas discoveries proved to be economically unavailable.

Weerakkody told Daily FT that the Government is seeking the best local company to invest on the project since the amount was affordable.

“I have already notified business chambers to put forward options of local companies to carry the financial assistantship of the survey project with Bonavista,” he said.

New technology offered by UAE company for Mannar basin exploration

Shine Quests FZC, a UAE based company, has submitted a proposal titled ‘Project SHINE’ to the Sri Lankan Government to provide free-of-charge data valued at $ 200 million, to survey the Mannar basin to identify potential gas and petroleum deposits provided the Government agrees to a multi-client agreement to market its Project SHINE data to international oil companies.

Shine Quest Managing Director Saahil Syed Saif outlined in a press statement released by his company that Project SHINE is designed to deliver Sri Lanka with a highly prospective solution that would enable Sri Lanka to realise major hydrocarbon discoveries that will help generate new hydrocarbon revenues much sooner from the Mannar basin.

Shine Quests is the technology rights holder for the territory of Sri Lanka of the advanced state-of-the-art Stress Field Detection – or SFD Technology from NXT Energy Solutions, Canada. The SFD Technology identifies trapped fluid potentials by confirming the simultaneous existence of a Trap, Reservoir and Seal, the press release said.

Project SHINE will identify all locations within the Mannar basin with trapped fluid potentials within the fractured zones and conduct a detailed analysis of all the existing PRDS Seismic data though its detailed integration process in the Mannar basin to find prospects for drilling. These prospects will identify all potential structures based on seismic data within the basin that has trapped fluids within sea led reservoirs based on SFD Technology Survey.

Project SHINE is a proposal to deliver Sri Lanka with a solution that will help the country realise their first new hydrocarbon revenues from their own basin. “By the very technical nature of this project, Project SHINE will not only help locate all the potential prospects in the Mannar basin, but it will also identify any potential large accumulations within the basin to begin concentrated development programs,” said Saif.

However, Shine Quest has also requested Sri Lanka’s Petroleum Resources Development Secretariat (PDRS) for a multi-client agreement with the Government of Sri Lanka for the marketing rights of Project SHINE.

“Shine Quest will market the Project SHINE data under a multi-client agreement to international oil and gas companies who are interested in exploration and production of the prospective blocks of the Mannar basin. Shine Quest also intends to share the marketing royalties from the sale of Project Shine data with the Government of Sri Lanka,” the press release said.

“NXT technology is new and innovative, and will be evaluating their proposal with interest. The fact that oil and gas companies have committed to pre funding the proposed survey, is indicative of positive sentiment towards the hydrocarbon potential of Sri Lanka, and we hope to translate this to higher bid activity during our next licensing round,” PDRS Director General Saliya Wickramasuriya is quoted as saying in the company press release.