Oil drilling in Sri Lanka's Mannar Basin will commence in July this year Cairn India said.
"Frontier exploration drilling in the SL 2007-01-001 block in Sri Lanka is planned to commence in July 2011. A drill ship has been contracted and logistical preparations and detailed studies are ongoing ahead of drilling later this year" releasing its third quarter interim results for the period ending December 31, 2010 Cairn India said.
Sri Lanka has eight oil and gas exploration blocks in the northwestern Mannar basin, two of which have been granted to the governments of China and India.
Following discussions between President Mahinda Rajapaksa and Russian Gas and Oil company Gazprom in February this year the Russian government has agreed to start oil and gas exploration in the seas off Mannar.
Sri Lanka will call international tenders for the rest five blocks soon.
A Petroleum Resources Agreement was singed in 2008 between Cairn India and the government to explore and produce hydro - carbon and natural gas in the Mannar Basin in Northern Sri Lanka.
The Exploration license is valid for eight years and divided into three stages of three, two, and three years. The Government of Sri Lanka will receive all exploration data, and the Contractor will be required to support education and training of staff, support environmental studies and transfer related technology to Sri Lanka.
In 2009 the Company commenced its 3 D seismic survey in the Mannar Basin. The programme will fulfil the commitment of 1450 km of 3 D seismic data acquisition and will be acquired by CGG Veritas AS using the seismic vessel “SR/ V Viking II.
Once the data acquisition is completed drilling will proceed in early 2011.
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.