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Offshore Drilling Next Year

Jun 17, 2010 6:41:36 AM - thesundayleader.lk

Pier off the Mannar coastline

‘Offshore drilling in the Mannar basin will commence from late January 2011 to May 2011’ said Petroleum minister Susil Premajayantha speaking to the Sunday Leader. The drilling in question is proposed to be carried out by companies subcontracted by Cairn, who are calling for tenders from drilling companies for the same right now. This follows 3D seismic surveys carried out by Cairn apparently confirming the presence of sufficient evidence of oil reserves to warrant initial drilling activities.

The Mannar basin has 8 such ‘blocks’ of space available for oil exploration. Only one such block has been allocated to Cairn for operations. Two other blocks have been allocated to the Indian and Chinese governments, who are as yet to commence working on these areas. The remaining 5 blocks are scheduled to be tendered off within the next two or three months, the Minister said.

Off shore drilling is increasingly becoming a more frequent activity as oil reserves with easier access are fast depleting all over the world. It is much riskier and more expensive than conventional drilling and the current crisis in the Gulf of Mexico happened after BP’s deep sea oil rig exploded 5000 feet below sea level.

The demand for fossil fuels are is unlikely to fall in the foreseeable future with fast developing economies’ oil hungry bellies growling for more growth. Sustainable energies are currently too weak to sustain prolonged growth and are nowhere near as reliable as fossil fuels.

Sri Lanka stands to make a lot of money from possible gains from oil deposits but a lot will depend on how intelligently it designs and enforces its contracts. Many oil rich states have failed to capitalize on their natural wealth due to corruption and exploitation and have even given rise to acts of terrorism like in the Niger delta.