Sri Lanka will sign agreements with French oil and gas major Total and a subsidiary of US firm Schlumberger for a seismic study off its east coast to evaluate any prospective oil resources, a top official has told Reuters on Friday.
Vajira Dassanayake, the director general at Petroleum Resources Development Secretariat (PRDS), has said a first deal signed with Total in 2016 to conduct a study off the eastern coast did not take place due to “some issues”.
“We are hoping to sign a new agreement with Total later this month,” Dassanayake told Reuters.
Total had earlier signed a two-year agreement with PRDS to survey around 50,000 sq km off the east coast from the air, at a cost of $25 million to acquire data on unexplored areas.
Dassanayake said Total will invest $3 million to $10 million for the seismic study, while Eastern Echo Holding Ltd, a subsidiary of Schlumberger, will carry it out.
“It’s a marine survey. There will be more resources allocated this time compared to the previous agreement. They will have the marketing exclusivity for a certain period until they recover their cost,” Dassanayake said.
“Actual ownership of the data will be with the government of Sri Lanka. They (Total) have one year to negotiate with us and to give us a favorable contract for production and sharing.”
Officials from Total and Schlumberger had not immediately responded to requests for comment.
Sri Lanka produces no oil and is dependent on imports for all of its fuel requirements despite trying to reinvigorate oil and gas exploration after the end nine years ago of its 25-year civil war with the LTTE.
Importing oil cost Sri Lanka USD 3.2 billion in 2017.