Sri Lanka to auction around 900 offshore oil blocks

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Sri Lanka has joined the list of countries looking to garner as much investment as it can from offshore oil and gas resources. President, Ranil Wickremesinghe, recently finalised new regulations to allow for companies to sign an expression of interest (EOI) to explore offshore assets around the country.

Close to 900 blocks will be up for grabs, said Surath Ovitigama, director general of the state-run Petroleum Development Authority.

Quoted in a Reuters report, Ovitigama believes with the licenses awarded, investor confidence will be boosted and serve to attract the next wave of EOIs.

Attempts were made by Sri Lanka to start up oil production but this focused on the country’s northern coast. This time, the government has mapped assets from all sides of the island.

The Mannar Basin, which lies between southern India and northwestern Sri Lanka, may hold around US$260 billion worth of oil and gas resources, Sri Lanka’s former energy minister had said back in 2021.

Sri Lankan authorities hope that exploration work could start as early as March and any success in the initial exercise will lead to production-sharing agreements for gas and oil, Ovitigama outlined.   

He disclosed to Reuters that two companies have already expressed serious interest and requests for proposals (RFPs) will be issued shortly, leading to negotiations for exploration licenses. ONGC Videsh Limited (OVL), the overseas arm of India’s state-run oil explorer, is a frontrunner seeking to explore multiple blocks off Sri Lanka’s north and north-west shoreline. 

Among the other countries forging ahead with more oil and gas exploration is the United Kingdom with over 930 blocks on auction. There are also planned auctions for Suriname, Barbados and Guyana’s maiden oil block auction, currently in progress.

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