Sri Lanka Petroleum Industry
BACKGROUND
The Ministry of Petroleum & Petroleum Resources Development is charged with undertaking the following functions on behalf of the peoples of the Democratic Socialist Republic of Sri Lanka:
- Formulation and implementation of policies, plans and programmes in respect of petroleum Resources Development
- Exploration activities of all petroleum based resources in Sri Lanka
- Make necessary institutional arrangements to perform the business activities of oil and gas exploration of the country
- Administration of the petroleum Resources Act, No. 26 of 2003
- Import, export, refining, distributing and selling of petroleum based products and natural gas
- Producing and refining of petroleum products
- Distribution of making of gas from sources such as petroleum products, coal etc
- Energy efficiency, demand management etc
Sri Lanka's oil and gas exploration began approximately 40 years ago with the acquisition of the first offshore seismic reflection survey by Compaigne General de Geophysicque (CGG) performed on behalf of the Ceylon Petroleum Corporation (CPC or Ceypetco) in 1967. Well drilling in region occurred during 1974 and 1981. Although hydrocarbons shows have been encountered as the result of drilling, no commercial exploitation has occurred. Recent successes in neighbouring basins, in India, have reinvigorated interest in the offshore of Sri Lanka. This is further justified when the results obtained from recent seismic acquisition programmes in the Mannar Basin in 2001 and 2005 are taken into consideration.
Following recent new geophysical re-evaluations of the Mannar Basin offshore Sri Lanka, an 8 block subdivision of the region has been determined for the licensing of acreage across the basin. In 2007, two blocks in the offshore Mannar Basin have been awarded directly to Indian and Chinese companies. Three offshore blocks covering the central tranch of the Mannar Basin are now being offered here for licensing with a further three blocks being offered for licensing at a later date.
NEW OPPORTUNITIES
- Cauvery Basin (east coast India)
- Mannar Basin (west coast Sri Lanka)
;)
click to enlarge.
To date, most exploration efforts have focused on the onshore and shallow-water Cauvery Basin resulting in the discovery of 18 oil and 11 gas fields. The hydrocarbon source is attributed to lacustrine and restricted marine shales of possibly Late Jurassic to Early Cretaceous age deposited in a syn-rift asymmetrical graben. Additional Turonian source rocks related to maximum condensed sedimentation also exist.
The Mannar Basin is under-explored with only 4 exploration and 3 stratigraphic wells drilled all of which are situated on the north-eastern shallow continental shelf of Sri Lanka. No deep-water drilling has occurred to date. Seeps reported in the basin indicate the presence of an active petroleum system with expected source rocks similar to those found in the Cauvery Basin.
Seismic data acquisition programmes were conducted across the greater area of Mannar Basin in 2001 and 2005. Subsequent studies performed on the data acquired indicate areas of significant potential with large scale structural, stratigraphic and structural/stratigraphic trapping styles and a potential hydrocarbon source that is believed to be presently at peak oil generation in the basin. Comparisons have been made not only with systems such as those encountered in the Cauvery and Krisha Godavari Basins in India but other international regions such as offshore southeast Brazil, the Gulf of Suez, Nile Delta and East Kalimantan.
ADVANTAGES OF INVESTING IN SRI LANKA
- Location advantage
- Investment climate
- Good infrastructure
- Skilled and literate human resources
- Attractive fiscal incentives
-
Preferential market access
- Indo Lanka FTA
- Sri Lanka Pakistan FTA
- GSP +
- Total foreign ownership in most sectors
- No restrictions on repatriation of earnings
- Safety of foreign investments guaranteed
- Commercial law is based on British Law
- Investment protection agreements with over 200 countries
- Double taxation relief agreements with over 30 countries
Source of Information: Petroleum Resources Development Secretariat Ministry of Petroleum & Petroleum Resources Development, Sri Lanka