The Sri Lankan government Tuesday inked an agreement with two energy companies from Norway and France to carry out a two-year oil and gas exploration exercise in the Eastern sea basin.
The tripartite agreement between the Government of Sri Lanka, France’s Total EP and Norway’s Equinor ASA for the exploration of oil and natural gas in the Ceylon Basin off the eastern coast was signed in Colombo.
Minister of Highways & Road Development and Petroleum Resources Development Kabir Hashim and officials of Total and Equinor signed the agreement at the Ministry.
The agreement will cover oil and gas exploration in two blocks identified as J5 and J6 in the eastern offshore region.
Speaking at the event Minister Hashim said Sri Lanka will be made an oil and natural gas producer by 2022. He said Sri Lanka has entered into a study agreement with Total and Equinor to explore two blocks JS-5 and JS-6, signed in 2016, for oil and natural gas.
Total has already surveyed 50,000 square kilometers on the East coast as part of a previous study and Equinor will have a 30 percent stake in the exploration as per the new agreement, according to the Minister. The Minister said the studies done so far and data from a previous seismic survey have reported very positive results that the JS-5 and JS-6 blocks have significant potential.
He said once the exploration work is completed, the next target is the production and distribution of oil or natural gas that was discovered and the government hopes to discuss with the two companies and going forward enter into an agreement for production and distribution.
The Minister said he believes that if the explorations were started next year, Sri Lanka will be a natural gas or oil producer by 2022.