SL in second round of tapping offshore gas and oil reserves
As hopes grow in Sri Lanka that its off shore Mannar Basin has sedimentary deposits that are thick and old enough to yield high quality oil and gas sufficient for the next 60 years, at least 11 companies including highly reputed major international oil and gas firms have submitted expressions of interest to tap gas reserves there.
These companies have expressed their interest on a call for bids by the Petroleum Resources Development Ministry in February 2017 to undertake the appraisal plus development of gas discoveries and prospects in the 2,924-sq km offshore block M2, Mannar Basin, a senior official of the ministry revealed.
The Petroleum Resources Development Secretariat (PRDS) is expected to close the bids in September this year. Four years of studying seismic and test well data and regional studies indicate source rocks with the potential to generate 5 billion barrels of oil and 9 Trillion Cubic Feet (TCF) of Natural Gas in the Mannar Basin, he disclosed.
These results were obtained by a quantitative basin assessment done in PRDS with contributions from geoscientists from Cairn and other reputed exploration companies. This scenario based modeling work was performed incorporating available well data, seismic data, literature etc and valid assumptions.
The results need to be verified further by drilling more exploration wells, acquiring new geophysical data and carrying out more studies and research in the region, he added. The Cairn Lanka exploration programme proved that there is a working petroleum system in the Mannar basin. In 2011 they have made two natural gas discoveries named “Dorado” and “Barrakuda” and the volumetric estimate of the two gas discoveries exceeds 2 TCF in the Block M2 (the size of the block is 3000 sq km), he said adding that this amount is also to be commercially verified through an appraisal programme.
The Public Accounts Committee (PAC) report recently tabled in Parliament revealed that the process of oil production from oil and gas well drilling would cost a hefty sum of US$ 50 million to $1 billion. The Mannar Basin block M2 is now at the level of entering into a development phase from exploration phase and the Petroleum Resources Development Ministry is seeking prospective investors towards this end.
The ministry signed a marketing agreement with US-based IHS Energy, one of the world’s largest energy consultancy firms, on December 14, 2016 to develop a marketing strategy, bid documents and partner selection criteria for consideration by the Government of Sri Lanka specifically for Block M2 recently relinquished by Cairn India.
According to the PRDS, Block M2 contains two gas discoveries and is rich in data. IHS will be assisting with the marketing of the extensive M2 3D seismic and well log data, conducting preliminary discussions with interested parties, and recommending the structure of a “mini bid round” for M2, aimed at selecting an operator for the block .
The Government entered into a Joint Study Agreement (JSA) on February 18, 2016 with French major Total, to explore two ultra-deep water blocks (JS5 & JS6) off the east coast of Sri Lanka for hydrocarbon prospects by conducting geological, geophysical and technical surveys, analyzing and interpreting the acquired data, and ultimately assessing the presence of commercially viable oil and gas.