Friday 26 February 2016

Marking a historic milestone in the oil and gas exploration in Sri Lanka, Hon. Chandima Weerakkody, Minister of Petroleum Resources Development, on behalf of the Government of Sri Lanka signed a Joint Study Agreement (JSA) on the 18th of February 2016 with French major Total, to explore two ultra-deep water blocks off the east coast of Sri Lanka.Total is one of the world’s largest international "super major” oil and gas companies, with operations in more than 130 countries.

The objective of this study is to explore the two offshore blocks(JS5 & JS6) off the east coast for hydrocarbon prospectivity by conducting geological, geophysical and technical surveys, analyzing and interpreting the acquired data, and ultimately assessing the presence of commercially viable oil and gas.

The duration of this JSA includes a period of two years from the effective date for data acquisition and for processing and interpretation. If this study indicates commercially viable oil or gas reserves, Total reserves the right to negotiate a production sharing agreement with the Government of Sri Lanka , failing which the Government may open the blocks to other bidders. In this case, Total retains the right to match the highest bidder for a specified period.

This study involves extensive collaboration and technical knowledge transfer without a production commitment, and contribute extensively to expose Sri Lankan technical and academic staff to modern data acquisition and interpretation methods. In addition, Sri Lankan Government will receive a ground rental of 1 USD per Sq Km for the entire acreage of the Joint Study Area valued at approximately LKR 7 million per annum.

Source: Ministry of Petroleum Resources Development - Sri Lanka