Sri Lanka to offer oil exploration block to ONGC

[May 10, 2006 - 12.15 GMT]

Sri Lanka will offer one oil and gas exploration block to Oil and Natural Gas Corp on a preferential basis, the country’s foreign minister, Mangala Samaraweera, said on Tuesday.

Samaraweera, on a three-day visit to New Delhi, said that his country hoped to gain from the experience of ONGC, India’s largest exploration firm, which has acquired oil and gas assets in more than a dozen countries.

‘‘Given our close relations, we are offering one block on a preferential basis to the ONGC. We are confident that the discussion on this will be finalised soon,’’ he said.

Sri Lanka, which produces no crude oil of its own, refines 60 per cent of its fuel requirements while the remaining 40 per cent of its oil products needs are imported from countries such as Malaysia and Saudi Arabia at $700 million a year, officials say.

Last month Sri Lanka’s oil minister had said that the government would float international tenders for oil exploration contracts in June and July, aiming to begin work in August for exploring an area of 3,500 square km.

Sri Lanka tried exploring for oil more than 20 years ago, but abandoned the operation after early results proved negative. But India’s discovery of gas in regions close to Sri Lanka has fuelled fresh hopes.

Reuters

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Last Updated Date: May  10, 2006 -12.15 GMT