July 07, Colombo: The government of Sri Lanka and Cairn India signed the Petroleum Resources agreement for the exploration licence to explore for oil and natural gas in the Mannar Basin at a ceremony in the Temple Trees this morning.

Minister of Petroleum and Petroleum Development Resources A.H.M Fowzie signed on behalf of the government while the Chief Financial Officer and Executive Director, Indrajit Banerjee and Head of Commercial and New Business, Mr. Ajay Gupta represented Cairn India.

After the signing ceremony Mr. Banerjee and Mr. Gupta handed over a bonus cheque for one million US dollars to the government. President Mahinda Rajapaksa, Prime Minister Rathnasiri Wickremanayake and Cabinet ministers were also present at the occasion. The company has formed Cairn Lanka (Private) Limited, a wholly owned subsidiary of Cairn India which would hold a 100% participating interest in the block which is offshore northwest of Sri Lanka and covers approximately 3,000 km2 in water depths of 200 metres to 1800 metres. The Block SL 2007-01-001 was awarded to Cairn India in the recent Sri Lanka bid round. “Cairn India is delighted to be awarded the exploration licence by the Government of Sri Lanka. The Mannar basin has not been explored in Sri Lankan waters and as such represents a frontier petroleum province,” Banerjee said after the ceremony. The exploration activities are to be commenced within 6 months. The exploration spending schedule of the company in the next three years is expected to be 112 million US dollars. The work programme includes proposals to acquire 5,000 km of 2D, 1,000 km2 of 3D seismic data and drill three wells in the initial three years of the eight year exploration period.

(Pix: Sudath Silva)