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Sri Lanka invites bids for deep-water block

Interested parties set to submit offers by early May for tract that contains two gas finds

Sri Lanka’s Petroleum Resources Development Secretariat (PDRS) has re-opened the tender process for deep-water Block M2 in the Mannar basin, which is home to two natural gas discoveries.

Bidding for the re-tendered block to the country’s highest oil and gas body is likely to close by 7 May.

"Bidders are expected to consider both development of the discoveries and the exploration of the rest of the M2 block," PRDS said, while inviting bids for the offshore acreage.

Sri Lanka set to offer acreage 'within weeks'

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PRDS added the block covers around 3500 square kilometres of area and has two gas discoveries, Dorado (91 H/1z) and Barracuda (1G/1), along with a number of undrilled prospects.

Cairn India (now owned by UK’s Vedanta Resources) three years ago relinquished deep-water Block M2 - formerly Block SL 2007-01-001 - after making the two gas finds, which are located 40 kilometres apart.

Estimated combined reserves of Dorado and Barracuda are thought to be upwards of 1 trillion cubic feet of gas and 10 million barrels of condensate.

PDRS is hopeful that a new operator will be willing to come on board to appraise and subsequently exploit the fields.

Any future gas production is likely be earmarked for domestic power generation, but the absence of a viable gas infrastructure in the country poses a major challenge for the block's development, industry sources have earlier told Upstream.

The Sri Lankan government earlier hoped that gas would be flowing from this acreage in 2021, but that timing now looks ambitious.

The PDRS is also expected to invite bids later this year for two shallow-water blocks — C1 and M1 - which lie in the Cauvery and Mannar basins, respectively.

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Separately, Schlumberger subsidiary Eastern Echo Holdings last year acquired seismic off Sri Lanka on a non-exclusive, multi-client basis ahead of the nation's upcoming licensing round.

Eastern Echo has also carried out a 2D shoot for French supermajor Total on its joint study blocks JS5 and JS6 off the nation’s east coast.

The data from Total’s survey is being processed and the PRDS is hoping that a positive outcome will see the operator commit to acquiring 3D seismic on the pair of ultra-deepwater blocks.

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