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Gas and oil exploration to expand; tripartite agreement with Norway’s Equinor and France’s Total
Oil and gas exploration off the country’s territorial waters is set to expand further with the Government looking to sign a tripartite agreement with international energy giants Equinor and Total while also finalising bids to develop natural gas in the Mannar Basin.
The tripartite agreement between the Government of Sri Lanka (GOSL), Norway’s Equinor and France’s Total on oil and gas exploration off the eastern coast will be signed on August 27, Vajira Dassanayake, Director General of the Petroleum Resources Development Secretariat (PRDS), told the Sunday Times.
The agreement will cover oil and gas exploration in two blocks identified as J5 and J6, the PRDS Director General stated. Total has already surveyed 50,000 square kilometres on the East coast as part of a previous study and Equinor will have a 30 percent stake in the exploration as per the new agreement.
Meanwhile, bids have now closed for the development of natural gas from the M2 block in the Mannar Basin. Three companies based in the UK and Dubai have submitted bids. Mr Dassanayake said that the bids would be assessed and that Cabinet would make a decision on the matter by September. “We hope to finalise the agreement on the M2 block by November. The GOSL will get 40 percent of the profits from the development of M2 under this agreement,” he explained. Surveys conducted have revealed that the M2 basin contains natural gas that is 96 percent pure and Mr Dassanayake said they hoped to produce natural gas from the block within the next three years. The agreements are the culmination of four years worth of data collection and exploration, Mr Dassanayake said.
Meanwhile, the PRDS recently signed an agreement with a UK-based company to conduct an airborne gravity magnetic survey from Mannar to Trincomalee to check for more oil and gas deposits, the Director General said.