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Wednesday, July 31, 2013 - 05.31 GMT

Sri Lanka woos global firms for oil, gas exploration


After the discovery of hydrocarbons in two offshore wells, Sri Lanka is wooing global companies to tap potential oil and gas resources in the island's west and north coast waters.

"We are expecting good response from the global oil and gas companies for the second round bidding following the two discoveries in Mannar basin by Cairn," said Petroleum Resources Development Secretariat (PRDS) director general Saliya Wickramasuriya.

PRDS, the Sri Lankan government agency responsible for overseeing all petroleum E&P-related activities on the island, has organized road shows in Houston, London, and Singapore to present potential hydrocarbon leads in the 13 blocks offered in the second round bidding.

The 13 blocks offered are: M-1, M-3, M-4, M-5, M-6, M-7, M-8, and M-9 in offshoreMannar basin and C-1, C-2, C-3, C-4, and C-5 in offshore Cauvery basin.

The blocks in the Mannar basin range in size from 2,714 sq km (1,048 sq miles) to 8,120 sq km (3,135 sq miles) in the deep to ultra-deep waters in the Gulf of Mannar. The ones in Cauvery basin are in the range of 2,403 sq km (928 sq miles) to 4,566 sq km (1,763 sq miles) in the shallow waters of the Palk Strait and deep waters in north Sri Lanka. The last date for submission of bids for these blocks is Nov. 29.

PRDS is also offering six blocks in the unexplored deep waters east and south of Sri Lanka to global companies to carry out geophysical studies and collect associated seismic data on a joint study basis. The selected company will have two years to collect the data and an option to negotiate a deal with the government for exploration and development of the blocks.

The six blocks are: JS-1, JS-2, JS-3, JS-4, JS-5, and JS-6.

The Sri Lankan authority is expected to award the exploration licenses for 13 blocks by 1Q 2014 and award the six blocks for the seismic studies within the next two months.

Colombo Displays Cairn's Success

The Sri Lankan authority is showcasing the discovery of hydrocarbons shows in two wells in the Mannar basin by Cairn Lanka Private Ltd. to lure global oil and gas companies.

Cairn Lanka, a subsidiary of Cairn India Ltd., discovered hydrocarbon shows in two of four exploration wells drilled in deepwater SL 2007-01-001 block in Mannar basin on Sri Lanka's west coast. It discovered hydrocarbon sandstone in the first well (LPL-Dorado-91H/1z ) drilled in a water depth of 1,354 m (4,442 ft). A gross 25-m (82-ft) hydrocarbon column in sandstone between the depths between 3,043.8 m (9986.2 m) and 3,068.7 m (10,067.9 ft) measured depth has been interpreted from log and MDT data to be predominantly gas bearing with some additional liquid hydrocarbon potential.

The Dorado is the first hydrocarbon discovery of Sri Lanka. The CLPL-Dorado-91H/1z well is the first well to be drilled on the island in 30 years.

The operator made a second discovery at the CLPL-Barracuda-1G/1 well in the same block. The well was drilled to a total depth of 4,741 m (1,555 ft) in a water depth of 1,509 m (4,951 ft) and encountered 24 m (79 ft) of hydrocarbon-bearing sandstone in three zones between the depths of 4,067 m (13,343 ft) and 4,206 m (13,799 ft). The reservoirs were predominantly gas bearing with some additional liquid hydrocarbon potential. The second successive discovery is located 38 km (24 miles) west of the CLPL-Dorado-91H/1z discovery well and approximately 68 km (42 miles) from the Sri Lanka coastline.

The third well , CLPL-Dorado North 1-82K/1, was plugged and abandoned as a dry hole. The fourth well, drilled as part of the second phase exploration plan, encountered high quality reservoir sands but they were water bearing. The well was plugged and abandoned.

Cairn Lanka is preparing to launch its third phase exploration program in the deepwaterblock awarded during the first licensing round in 2008.

"The company continues to consider appraisal options for the gas discoveries made and for continuing into exploration phase-III. Monetization of the existing discoveries continues to be evaluated under various development and commercial scenarios. Discussions with the government of Sri Lanka regarding commercial terms and gas pricing are progressing," the company said in an update released July 24.






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Last modified: July 31, 2013.

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