Sri Lanka is set to invite bids from international companies later this month for upstream petroleum development, including the exploration and extraction of oil and natural gas, in four blocks of the Mannar Basin.
The bidding process had been in the planning stage for a considerable period but was delayed due to a court case. The legal impediments have now been cleared, allowing the Government to proceed with the tender process.
The Government had previously invited tenders to select a consultancy firm with expertise in managing the international bidding process for upstream petroleum development.
Mannar Basin Petroleum Resources
According to a 2021 press release issued by the Parliamentary Media Unit, the Mannar Basin contains oil and gas resources valued at around US$267 billion.
Four blocks in the Mannar Basin are expected to be opened for development. Previous exploration has also identified natural gas in the area. In 2011, Cairn Lanka Limited, a subsidiary of an Indian firm, drilled two exploration wells in the Mannar Basin and discovered natural gas in the Barracuda and Dorado fields.
Sri Lanka’s Natural Gas Policy
Sri Lanka gazetted a national policy on natural gas in September 2020. The policy outlined strategies to create domestic demand and provided operators with options to commercialise offshore gas.
The Petroleum Resources Act No. 21 of 2021 was introduced to regulate petroleum exploration and production activities.
Regional Offshore Exploration
The move comes as countries in South and Southeast Asia have sought to invest in offshore oil exploration amid tensions in the West Asian region.
In India, the Union Cabinet approved the National Offshore Exploration Scheme, known as Samudra Manthan, with a total allocated budget of US$8.83 billion through the financial year 2030–31. The programme aims to expand oil and gas exploration in India’s offshore areas.
Bangladesh has also invited international companies to explore its oil and gas reserves.
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