Black Gold

May 10, 2008 (LBO) – Sri Lanka is to award its first offshore oil exploration contract before the end of May, petroleum minister A H M Fowzie said. The ministry was preparing a paper on bids received for offshore exploration and its recommendation to submit to the cabinet of ministers for approval next week, he told a news conference Friday.

“We will award the contract before the end of May.”

The government offered three exploration blocks in the northwestern Mannar Basin and received bids in January from three firms, mainly regional players focusing on India and south Asia.

But only block No 1, in the north of the exploration area and closest to India which is already drilling oil, drew interest from all three bidders, ONGC Videsh, Cairn India, and Niko Resources of Canada.

The award of the contract has been repeatedly postponed raised concern among the island’s private sector companies who have been positioning themselves to provide support services for the offshore industry.

The government announced earlier that it was only evaluating the block for which it received three bids and that it would be awarded to the bidder