Sri Lanka’s Government has opened an international bidding round to explore and produce oil and natural gas in two blocks in the Mannar and Cauvery Basins, the Petroleum Resource Development Secretariat (PRDS) said in a document released to public. PRDS in the document said that the bids for the Mannar Basin's M1 block and the Cauvery Basin's C1 block, will close on July 15, whilst the M1 and C1 blocks cover 2,779 square kilometres and 2,246 square kilometres respectively.

Reports note that a Sri Lankan parliamentary report had earlier said that there is high potential for oil and gas in the two blocks, based on petroleum system modeling analysis carried out by the PRDS and foreign geoscience experts. A Chinese seismic vessel began surveying the Mannar Basin in October 2018 and the US firm Bell Geospace Ltd won a contract in February 2019 to survey the Mannar and Cauvery Basins for oil and gas deposits using gravity and magnetic techniques. Reports further outline that the Sri Lankan government even reached out to the Russian government to obtain Soviet Era seismic data for the Cauvery Basin in the lead up to the current bidding round and the government had attempted to license the exploration and production rights for the two neighbouring blocks to a firm named Serendive Energy Pvt. Ltd in 2018 through a Swiss Challenge round.

Reports noted that the bidding round would have ended on May 07, and the government had extended the deadline by a month due to ongoing security concerns in Sri Lanka.

M1 block’s southern neighbour, the M2 block, has gas deposits according to earlier finding. Now Indian billionaire Anil Agarwal controlled Vedanta group owned Cairn India drilled two oil wells in M2 block that had been identified to holding over several billions of cubic feet of Natural Gas could collectively generate over 2.6 GW (Giga Watt) Power for 40 years for Sri Lanka, according to a last annual review of the Ministry of Petroleum Resources Development. Accordingly the report highlights that the development initiatives taken by the government during the recent past years from 2008 have laid the foundation for oil and gas exploration sector in Sri Lanka.

“Sri Lanka has already discovered her own gas depositories in Mannar basin. It has been revealed that the smaller “ Dorado” reservoir has 300 BCF (Billion Cubic Feet) of Natural Gas (NG) that can fire 630 MW (Mega Watt) power plant for about 10 years” the annual report notes.

“The more complex larger “Barracuda” discovery exceeds 1.8 TCF (Trillion Cubic Feet) of NG that can fire 2,000 MW power plant for 30 years” the review notes adding that at present, the actions are being taken to commercialize already discovered oil and gas deposits through International Competitive Bidding.

Cairn India’s 100% owned subsidiary - Cairn Lanka that had a 100% participating interest in the Block M2 of Mannar Basin in Sri Lanka, and the block contains two natural gas and condensate discoveries (Dorado and Barracuda) both of which were discovered by exploration activities carried out by Cairn Lanka in 2011. Earlier reports highlight that the volumetric analysis of these two discoveries has indicated a combined potential reservoir capacity in excess of 2 TCF (Trillion Cubic feet) of natural gas and 10 million BBL (barrels) of condensate. According to reports during 2008 – 2015 a sum of US $ 26 million has been spent on petroleum exploration activities for local capacity building and procurement of local goods and services by the Operator of block M2 in Mannar (ex-Cairn SL 2007-01-001). Nearly 17 local suppliers transacted US $ 18 million services during this period demonstrating a slow emergence of a new industry. Four local universities had been assisted and guided to establish upstream petroleum related course modules. The M2 block exploration program itself is a US$ 240 million worth of a petroleum data asset, conclusive of two gas discoveries, as per an earlier report of PRDS. Thus far PRDS has made Rs. 700 million data sales and the owner of valuable petroleum data that may lead to massive production sharing contracts in the immediate future

The Mannar Basin alone has the potential to provide for Sri Lanka's energy needs for 60 years, the PRDS has estimated according to reports.

- Reporting by Devendra Francis