Billionaire's Exit Prompts Sri Lanka to Seek New Oil Explorer
(Bloomberg) -- Sri Lanka will issue a fresh international tender for offshore oil and gas blocks after billionaire Anil Agarwal’s Cairn India Ltd. relinquished its exploration rights in the South Asian island.
Cairn will be “departing in a couple of weeks” after coming to an agreement with the Sri Lankan government, petroleum minister Chandima Weerakkody said in an interview on Monday. The island nation will keep Cairn’s seismic study worth about $300 million and won’t charge any penalty for pulling out," he said.
“We are at an advantage because we have all the data collected by them,” Weerakkody said. “Therefore we will go forward with the next step. We are going to expedite the international tender process.”
Sri Lanka, which doesn’t produce any oil or gas and imports all its needs from nations including Saudi Arabia, will hold an international roadshow this year to promote blocks on Sri Lanka’s western coast of Mannar. The island nation, where a three-decade civil war ended in 2009, is looking for technology to unlock the potential of the area neighboring India, where companies including Reliance Industries Ltd. and BP Plc are present.
Cairn India’s exit followed a one-time, non-cash impairment charge on acquisition goodwill for the the SL 2007-01-001 block, which covers approximately 3,000 square kilometers (1,158 square miles), in the quarter ended March. The charge was triggered by the fall in crude oil prices, which declined 43 percent in the past year. The company increased focus on producing more from fields in Rajasthan state in north India, while cutting overall capital expenditure.
Cabinet Approval
Sri Lanka’s cabinet in July approved inviting new international bids for commercial development of natural gas deposits found in the Mannar basin block.
“All the top oil companies believe that Sri Lanka is blessed with gas and oil,” Weerakkody said, adding that the government hadn’t considered offering incentives for exploration. Total SA, Europe’s third-largest explorer, is seeking a joint study in two blocks on Sri Lanka’s eastern front, Weerakkody said. Two other companies are also interested in conducting seismic studies in the island’s northern belt, he said without naming them.
-- With assistance from Abhishek Shanker in Mumbai.
To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net. To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net Abhay Singh, Indranil Ghosh
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- I Squared Eyes Full Ownership of Europe Gas Storage Firm
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension