Colombo Delays Offshore Round

Sri Lanka has delayed launching an exploration for blocks off the island's north-west coast until August, but is still aiming for exploration to begin in the middle fo next year, the government said today.

Petroleum and petroleum resources development ministry secretary APA Gunasekera said the tender delay was due to 'unavoidable circumstances', but did not elaborate. The government had been planning to launch the tender this April, a Reuters report said.

"I strongly believe that by August we will be able to call tenders if there are no other disturbances which are beyond our control," Gunasekera told Reuters.

The government says seismic data shows the north-west offshore play more than one billion barrels of oil, though no reserves have yet been proven.

Gunasekera said the government will call tenders for three of eight blocks identified in the Mannar basin and of the remaining five, two had already assigned to China and India.

He said the government has not yet decided about assigning the remaining blocks or the exploration of oil off other parts of the island nation, including the far north-east, which Tamil Tiger rebels control.

Experts put the delay down to the fact that oil exploration is new to Sri Lanka, and that the government must draft rules and regulations and build up sector expertise, Reuters said.

"This is something new to us and where the ministry doesn't have the (expertise) other than a very few people," said former petroleum secretary Jaliya Medagama, a past chairman of state oil company Ceylon Petroleum Corporation.

"When I left the ministry in October 2005 we didn't have anyone who knew about these matters."

He played down any threat from the Tigers to such oil exploration, citing the fact that it was done far out to sea, and said a mid-2008 start sounded feasible.