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Cairn India likely to start oil drilling in Sri Lanka in August

29 Jun 2011 Evaluate

Cairn India, India’s biggest private sector exploration and production company, likely to start drilling for oil in Sri Lanka's northwestern Mannar basin in August, though commercial production would be at least six years off if it finds any.

Cairn Lanka, a subsidiary of Cairn India, has awarded one of eight blocks to with an area of 3,000 sq km by Sri Lanka. Cairn expects to drill three wells. Sri Lanka gave one block each to India and China in 2007, but neither of the Asian giants responded positively. Sri Lanka has planned to award other blocks as well by tender. American and Russian companies from the mid-1960s to 1984 undertook exploration work in the Cauvery basin, but no commercial oil was produced and Sri Lanka's civil war ended exploration.

Sri Lanka's government has said previous seismic data showed potential for more than 1 billion barrels of oil under the sea in a 30,000 sq km area of the Mannar Basin, located further south along the western coast. Sri Lanka produces no oil and is totally dependent on imports, which cost it $3 billion in 2009.

Peers
Company Name CMP
ONGC 279.25
Oil India 454.40
Jindal Drilling&Inds 535.85
Deep Industries 457.70
Asian Energy Service 297.85
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