Cairn India, a unit of British exploration firm Cairn Energy Plc, has
secured rights to explore oil and natural gas deposits off Sri Lanka's
coast, the island's petroleum minister said today.
The area, known as block one, covers around 3,400 square kilometres
off Sri Lanka's northwest coast, AHM Fowzie said. "There were three
players who bid for the block and cabinet of ministers decided to give
it to Cairn," Fowzie said in a statement.
Sri Lanka, which imports all its oil needs, offered three blocks to
investors after seismic surveys showed oil deposits along the Gulf of
Mannar close to neighbouring India.
However, in April the island withdrew two blocks after receiving fewer
offers than expected. Besides Cairn, India's state-run ONGC Videsh and
Canada's Niko Resources bid to explore block one.
Fowzie said he expects Cairn to send a team to sign the agreement by
the end of the month. Sri Lanka has already allocated two other blocks
to the governments of India and China.
The island spent just under $3 billion in 2007 importing oil, the
nation's central bank governor said recently, adding that the fuel
bill is expected to touch $4 billion this year.
Over 35 years ago, overseas companies explored areas off Sri Lanka's
northwest coast, but failed to find any oil and gas reserves worth
exploiting commercially
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