"We feel that Sri Lanka is next door to our discoveries and we have a good understanding of the geology in that (Cauvery Basin) area," Atul Chandra, President of International Operations, Reliance, told journalists in Colombo.

The island is to offer eight to nine blocks for investors for exploration through a bidding round, though the Indian government has asked for a block to be reserved on nomination.

Early seismic surveys carried out by Norwegian firm TGS Nopec show that Sri Lanka has potential reserves of about 10 - 50 million barrels.

"This has been a fact finding mission as to what investment opportunities are available for investment," Chandra said.

Potential opportunities also include a tie up with state oil giant Ceylon Petroleum Corporation (Ceypetco) for investments in oil refining.

"I have offered any help we can give for the refinery sector here and we will be interested in getting involved," Chandra said.

Sri Lanka has been trying to get private investment expand existing refinery capacity at Sapugaskanda, from 50,000 barrels per day to 150,000 barrels per day and turn out higher value products like diesel oil.

A team from Reliance met with Sri Lanka's Petroleum Resource Development Committee, Board of Investment (BOI) and other government officials while in Colombo.

"The company's main interest is to engage in upstream oil and petroleum exploration in Sri Lanka and to assist the Ministry of Petroleum Resources and the CPC by way of technology transfer, providing training in oil exploration and downstream development such as refining," a statement from the BOI said.

The Reliance Group is a US$ 22.6 billion revenue company, with interests in oil exploration and production, oil and gas, refining and marketing, petrochemicals, textiles, financial services and insurance, power and telecom.

-Zainab Ibrahim: zainab@vanguardlk.com