Oil and Gas Opportunities in Sri Lanka

An Expert's View about Oil in Sri Lanka

Posted on: 22 Sep 2010

Petroleum exploration is starting again in Sri Lanka after a hiatus of 25 years and the Sri Lankan government will call another bidding round for oil exploration in later this year.

Sector briefing Oil and Gas Opportunities in Sri Lanka Why Sri Lanka? In 2008 the Government of Sri Lanka, signed a Petroleum Resources Agreement with Cairn Lanka (Private) Limited after a bidding round marking the beginning of petroleum exploration of Sri Lanka after a hiatus of 25 years. Carin will start a three well drilling campaign off the Mannar basin in 2011. Even though no oil and gas accumulations have been discovered in the Mannar Basin or in the Cauvery Basin that lies within the jurisdiction of Sri Lanka, discoveries on the Indian side of . the Cauvery Basin give clues to the potential for viable petroleum systems offshore Sri Lanka. In quantifying this potential chance of finding hydrocarbon accumulations have been estimated at 60%. Find general information on the Sri Lankan market conditions on UKTI?s website. The Doing Business Guide for Sri Lanka gives an overview of the economy, business culture, potential opportunities and an introduction to other relevant issue. UK Trade & Investment Sector briefing: Oil and Gas opportunities in Sri Lanka staff overseas in British Embassies, High Opportunities Commissions and Consulates, across all sectors and in over 100 markets. Sri Lanka will call another bidding round for oil exploration in 2010. Model petroleum resource You can be alerted to business opportunities on agreements and development licenses have a regular basis by registering on the UKTI already been drawn up and legislation is in website. Find out more on UKTI?s business place. Details of the offer are as follows: opportunities service on the UKTI website ? Six blocks are to be offered in the Mannar Basin, with 4 to 8 kilometre thick sedimentary basin promising oil potential of about 10 to 50 mn barrels. ? Each license will cover recovery, storage, transport, and sale of oil or natural gas, with royalty payments made to the government on the market value of the resource. ? Exploration licenses will be for a maximum of 7 years in 3 commitment phases with the option to terminate after each phase. ? State royalties are generally 5% on the gross sale value of oil, and profits being shared between the state and the contractor. ? Successful bidders will also be given a 15- year tax holiday. ? Prospective investors will be given 5 months for international due diligence, buying available data packages prior to submitting technical and financial proposals for evaluation. ? The Government is looking for companies to conduct more 3D Seismic data analysis in the Mannar Basin and Cauvery Basin. In any petroleum development project, 75% of the reservoir is depleted in the first 5 years, so the government believes that the above terms allow the contractor adequate time to recover his cost and make a profit. In addition, Sri Lanka is looking for analytical services used in oil exploration including laboratory services, well testing, geophysical and geological analysis. If you have any questions on the opportunities above, contact the UKTI] contacts named in this report. Business opportunities aimed specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our UK Trade & Investment Sector briefing: Oil and Gas opportunities in Sri Lanka Major events and activities UKTI contacts Find full details of all events in this Nadeesha Epasinghe country and sector on the UKTI website. Deputy Head of UKTI New export events are added daily to the site Tel: 00 94 11 539 0661 and you can register to be alerted to them on a Email: nadeesha.epasinghe@fco.gov.uk daily, weekly or monthly basis www.ukti.gov.uk UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Oil and Gas opportunities in Sri Lanka Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Sri Lanka market are advised to you to meet contacts and promote your undertake as much market research and company in the Chinese market planning as possible in the UK. UKTI?s team in Sri Lanka with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Chinese market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Oil and Gas opportunities in Sri Lanka
Posted: 22 September 2010