Sri Lanka opens offshore oil and gas blocks to global bidders

Sri Lanka is now offering four offshore oil and gas exploration blocks for international bidding, authorities announced on Tuesday, more than a decade after an Indian firm halted commercial drilling due to high costs. The four blocks, covering approximately 34,000 square kilometers (13,127 square miles) in the Indian Ocean, present an opportunity for global bidders to explore, develop, and commercially produce oil and gas.

Energy Minister Anura Karunathilaka explained that the country has seen its fuel import bill surge up to five times since the conflict in the Middle East began in February. He expressed confidence that the time is now right to make progress with "great determination and a clear sense of purpose." Karunathilaka noted that advancements in technology over the past decade have made deep-sea drilling more affordable and optimistic about attracting investors to the project.

The government of Sri Lanka remains committed to ensuring that the exploration and development of offshore resources are conducted responsibly, transparently, and in a manner that generates long-term value. Neil de Silva, head of Sri Lanka's Petroleum Development Authority, shared that the cost of drilling a deep offshore well remains around US$40 million; however, the technology for extracting oil and gas has become more efficient.

Prospective bidders will gain access to extensive seismic, geological, and geophysical data amassed over several decades.

Estimates by Sri Lanka suggest that the gas deposits could be as high as nine trillion cubic feet, with oil reserves amounting to two billion barrels. The first drilling in the region was carried out by Russian firms in 1971 without any significant breakthrough. Sri Lanka subsequently abandoned the search until Norwegian firms assisted with seismic studies about two decades ago.