Sri Lanka to issue licenses for 900 offshore oil blocks to foreign firms

Sri Lanka, which doesn’t pump any oil at present, hopes to accelerate oil and natural gas exploration by issuing licences for around 900 offshore blocks for foreign firms with the introduction of new regulations this year. Sri Lanka plans oil and gas exploration licenses for 900 offshore blocks to foreign firms in a bid to explore energy resources and bring in vital investments to the crisis-hit island. The new regulations were finalised by the governmen  and set a framework for companies to sign an expression of interest for exploring offshore assets around the country. Previous attempts by Sri Lanka to start up oil production have mainly focused on the country's northern coast but this time the government has mapped assets surrounding all sides of the island. 

Sri Lankan seismic data shows there could be more than 1 billion barrels of oil in the Mannar Basin. The Mannar Basin, which lies between southern India and northwestern Sri Lanka, may hold around $260 billion worth of oil and gas resources. Director General of Sri Lanka’s Petroleum Development Authority has said exploration work could start as early as March and any success in the initial exercise will lead to production-sharing agreements for gas and oil. As per news reports ONGC Videsh Limited, the overseas arm of India's state-run oil explorer, is a front runner to get multiple blocks off Sri Lanka's north and north-west shoreline. India under the neighbourhood first policy has been assisting Sri Lanka through several of its key investment projects in various sectors including energy.
The current regime has been on a lookout to attract foreign investment as the President Ranil Wickremasinghe seeks to stabilise the economy amid the country's worst economic crisis in seven decades. As an oil importer, the island nation faced acute shortage of petroleum products due to forex shortages.