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Tuesday, March 13, 2012 - 4.10 GMT
Sri Lanka's potential oil reserves spark global interest- BBC


As hopes grow in Sri Lanka that viable reserves of oil are about to be discovered in its seawaters, commentators are speculating about the intentions of India, China and Russia in prospecting for it, BBC reported.

Sri Lanka has never produced oil but after the end of its war it is reviving the quest for it.

"We're quite confident that the Mannar Basin holds commercial reserves of petroleum," the director-general of Petroleum Resources Development Secretariat, Saliya Wickramasuriya, told the BBC.

"We now want to accelerate investment and development based on the Cairn finds."
There is optimism because the Indian portion of the Cauvery Basin has yielded oil deposits for several decades. More than 30 wells operate there and a Canadian company has rights over 1,360 sq km.

Mr Wickramasuriya says India's state-owned oil company, ONGC-Videsh, has visited Sri Lanka in recent weeks and wants to prospect in both the Mannar and Cauvery basins. It has made investment proposals which is still considering.

"we'd like to see a diversity of investors," he said.

He says several are interested - ranging from Russia's state-owned Gazprom and Vietnam's state-owned PVEP to the private French giant Total and smaller independents from Australia, the US and European countries.

He said Sri Lanka will "write to the whole world", including China, to attract bids.

Successful bidders will have to pay oil royalties and steep taxes to Sri Lanka in return for their licences, he further said.




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Last modified: March 13, 2012.

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