Oil search begins January

Indian Cairns awarded licences:

Hiran H. SENEWIRATNE

Oil exploration activities along the Mannar basin is expected to kick off early next year by an Indian oil company, Cairns Limited.They have been awarded exploration licences by the Government, Director General, Petroleum Resources Development Secretariat (PRDS) Dr Neil de Silva said.

“With the obtaining of licences from PRDS, the company has formed a local company called Cairns Lanka Limited, which is expected to invest US$ 112 million for the first phase of the project,” Dr de Silva said at a seminar on petroleum exploration in Sri Lanka, organised by the Sri Lanka Foundation Institute (SLFI) in collaboration with the Geological Society of Sri Lanka yesterday.

Cabinet approval was granted and they obtained the exploration licenses in October this year and hope to start petroleum exploration by January, he said.

The oil exploration project has been categorised into three phases. Phase one of the project will start early next year in a 3300 Km2 area in the Mannar basin. Once the oil exploration work is started it would take at least four years to obtain the first oil barrel,” de Silva said.

He said Sri Lanka’s oil exploration activities started in 1957 with an aeromagnetic survey by Hunting Survey Company of Canada, which was done with less technology. But now the technology is well advanced unlike those days and will explore patrolman in the deep sea of the Indian ocean.

Chairman Technical Committee on petroleum exploration project Prof. Ananda Gunathilake said Sri Lanka is rather late in starting oil exploration activities as the world is now looking for other sources of alternative energy with the fluctuation of oil prices in the global market.

“Petroleum will prevail in the world for the next 30 years therefore,” he said.

Speaking on the topic he said Sri Lanka needs 200 barrels of oil for a day and must look for the cost of production of a barrel, when countries like Kuwait cost of a production of a barrel will cost only less than US $ 2.

He said since the oil prices have dropped in the last few months in the world it would discourage oil and petroleum companies to invest in oil exploration in the future.

Therefore, it is need of the hour to go for alternative energy since this petroleum will prevail on for 30 years.

Upali Premaratne of the Central Bank said there is a 60 per cent probability of having petroleum in the Mannar and Cauvery basins which seems to be a gamble for oil exploration companies to invest in these areas.

“If oil is discovered they will have to form a new company called National Oil Company in collaboration of the Indian company, which will pay tax to the Government,” Premaratne said.