Sri Lanka is set to finalize the selection of a marketing consultant this week, paving the way for the international bidding process for commercial extraction of offshore oil and gas reserves in the Mannar Basin, an informed source said.
The government had earlier issued tenders to select a consultant firm with the expertise to manage the international bidding for upstream petroleum development.
Sri Lanka’s national policy on natural gas, gazetted in September 2020, outlines strategies for domestic demand creation and provides operators with options to commercialize offshore gas. The new Petroleum Resources Act No. 21 of 2021 has also been introduced to regulate the process. The Petroleum Development Authority of Sri Lanka (PDASL) serves as the independent upstream regulator.
According to the source, companies from India and Qatar have already expressed interest in investing in Sri Lanka’s offshore resources. While commercially viable natural gas reserves have been identified at various locations in the country, the government plans to initially focus on four blocks in the Mannar Basin.
A 2021 parliamentary media unit press release estimated the oil and gas resources in the Mannar Basin to be worth approximately US $267 billion.
Sri Lanka signed an agreement with Cairn India Limited in 2008 to explore oil and gas off the country’s north-western coast. In 2011, Cairn Lanka Limited, a subsidiary of the Indian firm, drilled two exploration wells in the Mannar Basin, discovering natural gas in the Barracuda and Dorado fields. However, extraction was considered too expensive at the time.
