Cairn India signs oil exploration pact with Sri Lanka

July 7th, 2008 - 7:13 pm ICT by IANS  

Colombo, July 7 (IANS) Cairn India Ltd Monday entered into an agreement with the Sri Lankan government to explore the oil and gas deposits in the north-western Mannar gulf of the island, Sri Lanka’s minister of petroleum resources A.H.M. Fowzie said. “Today we signed an agreement with Cairn India, formally offering them the rights to explore oil and gas deposits at block one in the Gulf of Mannar,” Fowzie told IANS just after signing the agreement at Temple Trees, the Sri Lankan prime minister’s official residence.

Indrajit Banerjee, a Cairn India director, signed the agreement with Fowzie in the presence of President Mahinda Rajapaksa, Prime Minister Ratnasiri Wickramanayake and several cabinet ministers.

Fowzie said the company has handed over a cheque for $1 million to the government.

Eight blocks have been identified for oil exploration in the Mannar Gulf, with Cairn India getting block-one. The government has decided to call tenders for other blocks also.

The minister said arrangements have been made to accelerate all activities related to Cairn, which is expected to commence exploration by early next year.

Annually, Sri Lanka consumes not less than four million tonnes of fuel products for various purposes and is totally dependent on imports.

With global oil prices soaring, Sri Lanka announced a dramatic fuel price revision late last month with 90 octane petrol now costing 157 Sri Lankan rupees per litre, as compared to 127 Sri Lankan rupees before the price hike.

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