Cairn India finds natural gas field off Sri Lanka's shore

Colombo: Sri Lankan President Mahinda Rajapaksa said on Sunday natural gas has been discovered off the Indian Ocean island nation in the Mannar Basin, where Cairn India Ltd. has been drilling exploratory wells since August.

“Explorers have informed me that they have found a gas deposit in the seabed,” presidential spokesman Wijayananda Herath quoted Rajapaksa as saying to an audience in the hill city of Kandy. Herath had no other details.

Cairn Lanka, a subsidiary of Cairn India, has one of eight blocks in the Mannar Basin and began drilling in August. Cairn India Ltd, confirmed the discovery of natural gas in Sri Lanka’s offshore Mannar Basin.

“Further drilling will be required to establish the commerciality of the discovery,” Cairn said in a statement, referring to the find at the CLPL-Dorado-91H/1z well drilled at a water depth of 1,354 metres (4,442 feet).

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The government in 2007 offered one each to India and China, but neither has responded positively, and the remaining blocks are to be awarded by tender.

Sri Lanka’s government has said seismic data shows the potential for more than 1 billion barrels of oil under the sea in a 30,000 sq km area of the Mannar Basin, off the island’s northwestern coast.

Sri Lanka produces no oil and is dependent on imports, which cost it $3 billion in 2009. Since the end of a 25-year war with ethnic Tamil separatists two years ago, the government has tried to reinvigorate oil and gas exploration.

American and Russian companies from the mid-1960s to 1984 undertook exploration work in the Cauvery Basin off the northern shore, but no commercial oil was produced and Sri Lanka’s civil war ended exploration there.

There are nearly 30 operating wells on the Indian side of the Cauvery Basin, and Calgary-based Bengal Energy Ltd. has exploration rights for 1,362 sq km there. Sri Lanka is hopeful that success will be reflected in its side of the field.

Reuters