Sri Lanka to Invite Bids for Offshore Oil and Gas Extraction in Mannar Basin: India and Qatar Show Interest

Sri Lanka is moving closer to launching commercial exploration of its offshore oil and natural gas reserves, with the government set to finalize the selection of a marketing consultant this week. The chosen consultant will facilitate international bidding for upstream petroleum development in the Mannar Basin.

An informed source revealed that companies from India and Qatar have already expressed interest in Sri Lanka’s upcoming oil and gas ventures.

The government previously called for tenders to appoint a consultant with the necessary expertise to handle the global bidding process, marking a major step toward energy self-sufficiency and foreign investment.

Sri Lanka’s National Policy on Natural Gas, gazetted in September 2020, provides strategies for domestic demand creation and offers investors multiple options for commercializing offshore gas. Additionally, the Petroleum Resources Act No. 21 of 2021 was introduced to regulate exploration and extraction activities, under the supervision of the Petroleum Development Authority of Sri Lanka (PDASL)—the nation’s independent upstream regulator.

While commercially viable natural gas deposits have been identified across several locations, the government initially plans to develop four blocks in the Mannar Basin.

According to a 2021 parliamentary report, the Mannar Basin holds oil and gas resources valued at approximately US$267 billion.

Sri Lanka’s journey into offshore energy exploration began in 2008, when the government signed an agreement with Cairn India Limited. The company’s subsidiary, Cairn Lanka Limited, drilled two wells in 2011 and discovered natural gas in the Barracuda and Dorado fields. However, extraction was deemed too costly at the time due to high production expenses and limited technology.

With global energy markets shifting and new investors showing interest, Sri Lanka is now positioning itself to unlock its offshore energy potential, which could significantly boost the country’s economy and energy security in the coming years.