ONGC to decide on exploration in Sri Lanka in a month

January 14th, 2009 - 9:05 pm ICT by IANS  

New Delhi, Jan 14 (IANS) The state-run Oil and Natural Gas Corp (ONGC) will take a decision on exploration of hydrocarbon assets in a block offered by the Sri Lankan government within a month, the oil minister of the island nation said here Wednesday.Sri Lanka had in 2007 offered ONGC a hydrocarbon block in Mannar Basin for exploration. But ONGC’s response has been lukewarm as there is little prospect in the block.

Sri Lankan minister for petroleum and petroleum resources development, A.H.M. Fouzie, who is in India to attend the Petrotech 2009 international conference on oil and gas, raised the issue with Petroleum Minister Murli Deora and ONGC chairman R.S. Sharma.

“I had raised this matter with the minister and ONGC chairman, who have promised to get back in a month,” Fowzie told reporters.

ONGC also finds the signature bonus of $13 million large. “But we can negotiate,” Fowzie said.

Sri Lanka had offered a block each to India and China in the Mannar Basin.

Cairn India has already won a block during the last bidding round, and has now bid for block number two, which has also attracted an offer from Nicco Resources. “We will take a decision in a couple of months,” Fowzie said.

Sri Lanka is in the midst of an expansion of its refinery capacity, and will seek Iran’s help in doubling the capacity of the state-run Sapusgakanda refinery to 100,000 barrels per day in four years.

The expansion will be funded by a $1-billion loan from Iran, with another $500 million to be spent by the Sri Lankan government.

The island nation currently imports 60,000 metric tones of light crude from Iran on a term contract basis.

Sri Lanka has also approved the setting up of a private refinery in Hambantota, which will have a refining capacity of 100,000 barrels per day.

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