The Sunday Leader

Wonder Of Asia Spotlight Oil Exploration

Of Black Gold and Riches for Sri Lanka  Prosperity doth bewitch men, seeming clear;  but seas do laugh show white ,when rocks are near
-John Webster, The White Devil-

Oil exploration would bring prosperity to our land

This column dedicated to the notion of making Sri Lanka the Wonder of Asia turns its spotlight on oil exploration in Sri Lanka as Sri Lankan society would aspire for such exploration to succeed as it would bring prosperity to our land although it may also spell danger due to the greed of Western powers yearning for oil supplies.
Recently Reuters: reported that Sri Lanka plans to auction new oil exploration blocks in the western Mannar basin and the northern Cauvery basin after finishing talks with India ’s state-run Oil and Natural Gas Corporation (ONGC) on exploration rights.  Cairn India has discovered natural gas in two wells in Sri Lanka ’s offshore Mannar basin, demonstrating the presence of hydrocarbons, although their commercial viability has yet to be determined. Saliya Wickramasuriya, Head of the State-run Petroleum Resource Development Secretariat (PRDS), told Reuters that: there was a plan to launch a bid round which will include the shallower part of the Mannar basin and Cauvery off the northern peninsula, ONGC had applied for exploration rights and the auction was called only after talks with the Indian company were finished, Wickramasuriya further said. “It will be approximately half of the Mannar acreage and pretty much all of the Cauvery other than what we might discuss and nominate to Oil and Natural Gas Corporation. Cairn India has said it will start another phase of exploration in the Mannar basin. Sri Lanka produces no oil and is dependent on imports, which cost it $4.6 billion in 2011. Since the end of a 25-year war with Tamil separatists three years ago, the government has tried to reinvigorate oil and gas exploration. The Government has said seismic data shows the potential for more than one billion barrels of oil under the sea in a 30,000 sq km area of the Mannar Basin, off the island’s northwestern coast. American and Russian companies from the mid-1960s to 1984 explored the Cauvery Basin but only traces were found and no commercial oil was produced. It has producing wells on the Indian side.
Prospecting for oil in Sri Lanka commenced in 1967, when the French Firm Compaigne General de Geophysique collected approximately 420 km of onshore and 75 km of offshore seismic data on behalf of the Ceylon Petroleum Corporation (CPC). In 1974 the Russians spudded Pesalai 1 on the Mannar Island followed by two more wells near Pesalai 2 and Pesalai but both failed to encounter significant deposits. In 1975 the CPC engaged Pexamin Pacific as a consultant to promote exploration in the Cauvery Basin. In 1981,Cities Services drilled Pearl 1, located on the northeast shelf of the Gulf of Mannar. This well was drilled to a total depth of 3050 metres without any oil or gas deposits being found. In 1984 prospecting for oil in Sri Lanka came to a halt until 2001 when the Petroleum Resources Development Secretariat launched the Mannar Basin Licensing Round. In 2008 the Government signed a Petroleum Resource Agreement with Cairn Lanka marking the inception of petroleum exploration in Sri Lanka after a lapse of many years.No commercial hydrocarbons were found in any of the drilling attempts in the Mannar basin but companies did encounter source-rock. Source-rocks contain organic matter and its presence is crucial for hydrocarbon formation. TOC (Total Organic Carbon) is a measure of how much organic matter, that is dead animals and plants, are in the source rocks. Some of the best source rock has 2-3 percent TOC. However, the source rock discoveries in the Gulf of Mannar in earlier drilling show almost 7 percent TOC.
Drilling for oil offshore is a very expensive operation. A single well offshore, using the best available technology to increase the chance of a discovery, could cost as much as $150 million. The deep sea drilling vessel Chikyu, contracted by Cairn India, has started drilling for oil off Sri Lanka ’s North Western coast on a block secured by the company for exploration. The Japanese fifth generation drill ship has been contracted to drill three wells in the Gulf of Mannar. Chikyu, designed as a research vessel, is capable of drilling up to 7,000 metres in to the sea floor where geologists will seek hydrocarbon deposits, which indicate the presence of oil and gas. Even if hydrocarbon deposits are discovered, commercial oil production is at least six years away. A hydrocarbon discovery would lead to a long process of appraisal and development where Cairn geologists will define the field size of the discovery, characterise the reservoir to understand how best to get the oil and gas out and make prepare a field development plan. Production wells will follow which will aim to extract as much of the oil as possible at minimum cost. Even in the best fields not more than 20 percent of the deposit is ever extracted. Thus it is evident that although deposits may exist these have to be sufficiently large in order to be economically viable for prospecting. There is also a belief that such deposits may exist as a continuation of the deposits in the Indian territory of the sea which may soon be depleted by the Indians drawing such supplies from their area.
Although Sri Lanka may strike oil, whether the resultant prosperity would reach the man on the street is uncertain. As seen in some oil rich countries like Libya and Iraq although the rulers wallowed in luxury the ordinary people suffered in silence. The greed of some rulers to amass wealth is so immense that it appears as though such rulers believe that they are immortal. The black gold if found in Sri Lanka would attract the attention of Western powers who would then attempt to destabilise the country in order to get their hands on the oil deposits as seen in some oil rich countries in the Middle East. Sri Lanka would be fortunate to strike oil as then at least its debts to the outside world may be settled in toto.
Let me conclude with an amusing anecdote as usual. This is a true story. When the writer was functioning as an Assistant Analyst for the Ceylon Petroleum Corporation while the Russians were drilling for oil in Pesalai, one night after a party some Russian geologists inebriated with Vodka were walking past the drill when they spotted black soil churned with lubricating oil used to lubricate the drill coming up the well. One of them jokingly exclaimed that Sri Lankan crude oil is coming up. Some of the persons around sent the news to the press immediately and in the next morning newspaper headlines screamed that Sri Lanka had struck oil. The samples were taken and brought to the Refinery Laboratory at Sapugaskanda for testing with drums besting in a procession with Kandyan dancers in a much publicized ceremony. The writer and another analyst tested them and found that the samples contained a mixture of sediment and lubricating oil, which resembled crude oil. As we were sworn to secrecy and revelation at that time would have brought the Government of the day into ridicule this fact was never revealed and it was reported in the media subsequently that although oil had been found the deposit was insufficient to be economically exploited. This fact is revealed today so as to avoid a recurrence of a similar ludicrous incident in the near future.

3 Comments for “Wonder Of Asia Spotlight Oil Exploration”

  1. West is best

    No matter how many wells they dig in SL, it will always remain a third world under privileged country begging for money from other first world economies.

  2. Trevor Jayetileke

    Finding our own Crude oil will be the ‘Game Changer’ for Sri Lanka. Till such time it will be a hand to mouth existence with financial frugality such as ‘Shoe string Budgets’ year in and year out that has been the story since Independence.
    A Country that has to go to the IMF or World Bank for hand outs will not have a voice in this World and the only way to change this situation is by finding ones own Crude oil which is the way that so many others have shown how it is done.
    To name just one example is to look at a country such as Norway which is a house hold name in Europe specially when it is Winter. Without oil do you think that Norway would have been one of the four co-chairs for Sri Lanka.
    Without wasting time Sri Lanka must make oil exploration its top priority if not becoming the Wonder of Asia will only be a pipe dream.

  3. Vis8

    …………so, what’s your point??

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