Total Signs Agreement to Explore for Oil, Gas in Two Offshore Sri Lankan Blocks

French energy major Total has signed an agreement with government of Sri Lanka to explore two ultra-deep water blocks off the east coast of Sri Lanka.

Sri Lanka’s petroleum ministry on Wednesday announced that the agreement was inked on February 18.

Total will explore the two offshore blocks, JS5 and JS6, off the east coast for hydrocarbon prospectivity by conducting geological, geophysical and technical surveys, analysing and interpreting the acquired data, and ultimately assessing the presence of commercially viable oil and gas, the ministry said. 

The duration of this agreement includes a period of two years from the effective date for data acquisition and for processing and interpretation.  “If this study indicates commercially viable oil or gas reserves, Total reserves the right to negotiate a production sharing agreement with the government of Sri Lanka, failing which the government may open the blocks to other bidders. In this case, Total retains the right to match the highest bidder for a specified period.”

Last year, Cairn India which struck gas in Mannar Basin decided not to go ahead with further exploration. In July 2008, the government of Sri Lanka and Cairn India signed an agreement for exploration licence permitting Cairn India to explore oil and natural gas in Mannar Basin. The Block SL 2007-01-001, which is in offshore North West Sri Lanka and covers approximately 3,000 Km2 in water depths of 200 to 1,800m, was awarded to Cairn India through a bid round held in 2008. Cairn Lanka is the operator with 100 percent participating interest.