"Generally, there are three factors investors would critically evaluate," said Kishu Gomes, managing director of Caltex Lubricants Lanka, the Sri Lankan unit of the Chevron Texaco oil multinational, which also expressed initial interest.
"These are the size of the opportunity, the country's situation, mainly security and the terms and conditions of oil exploration licenses."
Government officials had said earlier that most of the world's oil majors had expressed an interest in the offshore blocks on offer during roadshows in major oil centres.
But last week the government said only three firms, mainly regional players focusing on India and south Asia, has actually submitted bids.
These were ONGC Videsh, Cairn India, and Niko Resources of Cyprus.
ONGC Videsh is a subsidiary of state-owned Oil and Natural Gas Corporation, India's largest oil and gas company.
Cairn India, is owned by London-listed Cairn Energy, the biggest foreign petroleum operator in India, both onshore and offshore.
Canada-based Niko Resources is exploring for and producing petroleum and natural gas in Canada, India and Bangladesh.
"Oil firms from around the world took a look at it (Mannar offshore exploration blocks) initially," said Gomes of Caltex Lubricants Lanka.
He said Chevron Texaco "decided in the early stages" not to go through the bidding process because of other interests elsewhere."We knew from the beginning that the opportunity in Sri Lanka in relative terms was small – considering that globally they have discovered larger fields."