Cairn to invest $113 mn for Mannar Basin oil hunt
11 Sep, 2008, 2149 hrs IST, IANS
COLOMBO: Cairn Lanka, a wholly owned subsidiary of Cairn India, will invest $133 million (Rs.6 billion) on oil and natural gas exploration in the Mannar Basin off the north western coast of Sri Lanka, a company official said here on Thursday.
The investment commitment was made in an agreement that the company signed with Sri Lanka's Board of Investment (BOI) here on Wednesday. This investment agreement, which comes nearly two months after the formal agreement with Sri Lanka's petroleum ministry, would permit Cairn Lanka to commence exploration in offshore Block One (SL 2007-01-001).
The block covers 3,000 sq kms in water depths of 200 metres to 1,800 metres in the Mannar basin. "This is an agreement with Cairns to invest $113 million for its commitment to explore gas and oil deposits in the Mannar region," a BOI official said.
"This project is expected to generate not less than 60 local employment opportunities to begin with," the official said, adding that the project could get underway within the next five to six months.
According to the formal agreement singed in July this year, Sri Lanka will receive all exploration data, and the contractor will be required to support education and training of staff, support environmental studies and transfer related technology to Sri Lanka.
Cairn India, which has discovered 40 oil and gas deposits in India, has said the work programme in Sri Lanka included proposals to acquire two-dimensional seismic data over 5,000 sq kms and three dimensional seismic data over 1,000 sq kms.
The company has also proposed to drill three wells in the initial three years of the eight year exploration in Mannar.
According to research reports, eight blocks have been identified for oil exploration bids in the Mannar Gulf and the government of Sri Lanka has decided to call tenders for other blocks in the near future.
Meanwhile, a radical Marxist Janatha Vimukthi Peramuna (JVP) which is considered the third political force in the country has raised its strong opposition in parliament Wednesday for the oil exploration deal with an Indian firm.
Charging that the deal was hastily signed without even being discussed in parliament, the JVP, which is known for its anti-India stand, has said that the pact was flawed in many ways and urged the government to correct it with immediate effect.
Annually, Sri Lanka consumes not less than four million tonnes of hydrocarbon products for various purposes and is fully dependent on imports.
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