Cairn India arm plans to invest over $10 m in Lanka

buser bagging the right to explore oil and gas in Mannar basin, just off the north west coast of Sri Lanka, Cairn Lanka Private Ltd, a Cairn India subsidiary, plans to begin seismic data acquisition by late 2009 or early 2010.

Cairn India officials told FE that the Sri Lankan government granted the licence to Cairn Lanka in October last year, following the Lankan cabinet?s decision to offer block No. 1 in June last year. The block covers an area of 3,000sq km with depth of water between 656 and 5,905 feet. The block, which has the potential to produce one million barrel of crude, remains unexplored.

Cairn India sources said the company was planning to invest more than $10 million for exploring the block.

Sources close to the development said Cairn Lanka has already invited expression of interest from experienced marine seismic data acquisition contractors and intends to acquire 1,450 sq kms of 3D marine seismic and gravity & magnetic data.

Seismic data acquisition is a process, which works by bouncing sound waves deep into the water between various types of rock formation.

Following this, the data acquired is processed or interpreted after, which the decision to drill is taken.

An official said, ?We plan to do data acquisition during the 4th quarter of 2009 or first quarter of 2010. So drilling would take a bit more time.? In fact, the Sri Lankan government wanted exploration to start in early 2009 and drilling by 2010 but drilling activities are not likely to start before 2011, an official said.

Cairn India, which owns six blocks, has sought to conduct 3D seismic programme offshore India, following the 2D surveys done last year over 100 km in Krishna Godavari Basin, in which it has a 100% stake. The acquired data from KG basin were undergoing processing and interpretation, officials said.

Cairn India, in which British Cairn Energy PLC holds 69% stake, would shortly start production from its Mangala Oil Fields in Rajasthan with four drilling wells to produce 30kbpd or 30,000 barrels per day. The government of India has nominated Mangalore Refinery and Petrochemicals Ltd, Indian Oil Corporation and Hindustan Petroleum Corporation Ltd for the offtakes in 2009-2010.