Cairn to begin drilling for oil in Sri Lanka’s Mannar basin in August

May 26, Colombo: Cairn Lanka, a wholly owned subsidiary of Cairn India is to commence drilling for oil in the Mannar basin off Sri Lanka’s northwestern coast in August 2011, the Indian company said.

Cairn India, issuing its first quarter financial report Wednesday, said significant preparatory work for the Sri Lanka frontier exploration drilling campaign in the SL
2007-01-001 block has been completed.

The Company said a drillship has been contracted with the expected spud date in
August 2011.

Rahul Dhir, Managing Director and Chief Executive Officer, Cairn India said the strong foundation for the company’s growth created by the successful delivery of a large scale project, the continued focus on life cycle planning and low cost operations at several other sites along with the application of innovative technologies has placed the company in a position to explore oil in Sri Lanka.

“We are therefore, well placed for the exploration drilling campaign in the frontier Mannar Basin in Sri Lanka later this year,” Dhir has said.

Cairn India said it has a total of 10 blocks in its portfolio in three strategically focused areas Sri Lanka is one of them.

Cairn Lanka (Private) Limited is a wholly owned subsidiary of Cairn India that holds a 100% participating interest in the Mannar block in Sri Lanka.

Cairn signed the Petroleum Resource Agreement (PRA) with the Sri Lankan government in July 2008 to explore oil and natural gas in the Mannar Basin with an investment of US$110 million, spread over three years.

According to the Agreement, Cairn will start exploration activities in one of the 8 blocks in the Mannar Basin which covers 3,400 sq. km. at depths between 200 to 1,800 meters.

Mannar basin has eight oil and gas exploration blocks and two of them have been granted to China and India. Russia’s largest oil company, Gazprom also has indicated plans to take part in the exploration of offshore oil in the Mannar basin.

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