ONGC, IndianOil eye business in Lanka
New Delhi   05-Mar-2012

State-run oil companies such as ONGC and IndianOil have proposed to cash-in on exploration and refining opportunities in Sri Lanka. Both companies have visited the island country and reviewed opportunities that could be grabbed by them.

Sri Lanka would call for bids for seven oil and gas blocks in Mannar Basin in next two-three months, Susil Premajayantha, minister of petroleum of Sri Lanka said at second Asia Energy Summit. Indian companies such as ONGC and IndianOil have visited Sri Lanka and discussed opportunities, Premajayantha added. Summit held by Independent Power Producers Association of India (Ippai) in Colombo discussed co-operation for energy security, stability and sustainability in the region.

In 2008, Sri Lanka awarded exploration rights for the block SL 2007-01-001 in Mannar basin to Cairn India. At present, no oil or gas is produced in the island country.

Cairn has completed first phase of the exploration campaign in the Sri Lanka block, a company statement said on December 26, 2011. The exploration programme involved acquisition, processing and interpretation of 3D seismic data and a three well deep-water drilling programme. "This programme resulted in two successive gas and condensate discoveries — CLPL-Dorado-91H/1z well and CLPL-Barracuda-1G/1 well. The third well, CLPL-Dorado North 1-82K/1 was plugged and abandoned as a dry hole on December 14, 2011," Cairn has said.

At the same time, Sri Lanka is looking to set up new refinery to meet its increasing demand. It only operates single 40,000 barrels per day refinery. IndianOil representatives visited us and we have asked them to submit a feasibility report for setting up of a refinery, said Premajayantha.

The refinery sources crude oil from Iran and recent sanction imposed by the US and EU over the Islamic country has created uncertainties for Sir Lanka. "It’s sanctions imposed to small countries like us. We are suffering. We have an old refinery and use of other crude would be very expensive. Problems should be solved through diplomatic channels," Premajayantha added.