Sri Lanka has made four offshore exploration blocks available in the Northwestern Mannar Basin to international energy companies, marking the first major push under the current government to revive the country's stalled hydrocarbon sector.
Sri Lanka has announced the availability of four offshore exploration blocks in the Northwestern Mannar Basin, inviting international energy firms to assess and develop the nation's oil and gas resources. Energy Minister Anura Karunathilaka stated that the government seeks experienced companies to partner with Sri Lanka in responsible resource development. The Mannar Basin, situated between southern India and northwestern Sri Lanka, is estimated to contain approximately $260 billion in hydrocarbon resources, according to statements made to parliament by a former energy minister in 2021.
This initiative represents the first exploration effort under President Anura Kumara Dissanayake's administration and comes after decades of limited progress in the sector. Previous seismic surveys indicated that a 30,000 square kilometre area off the north coast holds over one million barrels of oil. Of the four blocks being offered, the second is the smallest at 5,689 square kilometres, while the fourth is the largest at 11,728 square kilometres. Unlike the 2007 licensing round, which allocated blocks to Chinese and Indian firms on a nomination basis, the current process will accept bids from any qualified international investor, according to Petroleum Development Authority officials.
Sri Lanka's offshore exploration history dates to the late 1960s, with a significant breakthrough occurring in 2011 when Cairn Lanka discovered substantial natural gas deposits in the Mannar Basin. However, commercial production never materialized due to complex deepwater extraction challenges, insufficient domestic infrastructure, and shifting global energy markets, leading Cairn to exit the block in 2015. To restart momentum, Sri Lanka enacted the Petroleum Resources Act in 2021 and established the Petroleum Development Authority to modernize regulatory frameworks. These reforms aim to attract international majors to explore the Mannar, Cauvery, and Lanka Basins while reducing the nation's dependence on coal and oil imports.
