Sri Lanka opens offshore oil and gas blocks to global bidders

Sri Lanka is opening offshore oil and gas blocks to global bidders, the government announced on Tuesday. This is the first time the island nation has offered such exploration opportunities since an Indian firm abandoned commercial drilling in 2015, citing high costs.

The blocks, covering approximately 34,000 square kilometers in the Indian Ocean, are part of Sri Lanka's efforts to address its heavy fuel import bill, which has surged up to five times since the conflict in the Middle East began in February. Energy Minister Anura Karunathilaka stated that the bidding process will remain open until early next year.

Karunathilaka believes that advancements in technology over the past decade have made deep-sea drilling more affordable. He expressed hope that the country will attract investors to undertake responsible, transparent, and value-creating offshore exploration and development.

The Mannar basin, located in Sri Lanka, has gained renewed interest following drilling by Cairn India and subsequent gas discoveries in some of their wells. However, the Indian firm ultimately exited in 2015 due to the wells' commercial infeasibility.

Sri Lanka's Petroleum Development Authority predicts that the offshore blocks could potentially hold nine trillion cubic feet of gas and two billion barrels of oil. To support prospective bidders, detailed seismic, geological, and geophysical data gathered over several decades will be made available to them.