Sri Lanka opens Mannar Basin exploration to companies from India, China and elsewhere

Sri Lanka has opened exploration in the Mannar Basin to international companies, with firms from India, China, the Middle East and elsewhere eligible to compete, Foreign Minister Vijitha Herath said.

Herath said the Government would not give preference to companies based on their country of origin and would select the proposal that offered the greatest benefit to Sri Lanka.

“Any company can apply,” he said, adding that the bidder could be from neighbouring India, China, Saudi Arabia or another country.

“There is no such distinction. A company from any country in the world can apply to undertake the exploration.”

Sri Lanka has renewed efforts to explore potential oil and gas deposits in the Mannar Basin, an offshore area west of the island and close to India.

Herath said previous exploration undertaken with foreign assistance had indicated the presence of gas in and around the Mannar and Cauvery basins, while data had also pointed to the possible presence of oil.

The Government had pledged before coming to power that it would restart exploration, he said.

Herath said the process had initially been delayed by a legal dispute after a party went to court over the matter. The issue had since been resolved, allowing the Government to proceed with an international call for proposals.

Sri Lanka would evaluate the bids on their economic merits and select the offer most advantageous to the country, he said.

The Mannar Basin has economic as well as geopolitical significance because of its location close to India and growing international interest in Sri Lanka’s strategic position in the Indian Ocean.

Herath acknowledged that a number of countries were interested in Sri Lanka’s natural resources but said the Government’s approach would remain open to international competition.

He said Sri Lanka would ideally have preferred to conduct exploration using its own technology, but the country currently lacked the technical capacity required for such operations.

“If we had the necessary technology, we could carry out the exploration ourselves. Unfortunately, we do not yet have that capability,” he said.

Herath said successful commercial development of gas resources could have a significant impact on Sri Lanka’s economy.

If commercially viable reserves were discovered and brought into production, they could help the country recover more quickly from the severe economic crisis it has faced in recent years, he said.