The Hindu : Joint oil exploration with Sri Lanka likely

Online edition of India's National Newspaper
Thursday, May 29, 2003

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International

Joint oil exploration with Sri Lanka likely

By V.S. Sambandan

Photo: Sriyantha Walpola

The Petroleum Minister, Ram Naik, with the Sri Lankan Prime Minister, Ranil Wickramasinghe, in Colombo on Wednesday.

COLOMBO May 28. Taking forward its new bilateral energy ties, India and Sri Lanka are likely to embark upon joint oil exploration shortly, the Minister for Petroleum and Natural Gas, Ram Naik, said here today.

Mr. Naik, who is here to inaugurate the Lanka IndianOil Corporation (Lanka IOC) and its retail outlets in Sri Lanka, said the Sri Lankan Government was "very keen to give oil blocks for exploration,'' but would have to wait for necessary legal changes.

The issue was discussed with the Sri Lankan Prime Minister, Ranil Wickremesinghe, today, Mr. Naik said, adding that progress would be made after the Sri Lankan Government finalised its policy decision.

"It will take two or three years to ascertain if oil or gas is available.''

India, he said, would like to have two blocks and the expertise available with the ONGC and the IOC would be utilised to conduct the surveys. It may be recalled that $100 million is to be spent by Lanka IOC, a wholly-owned subsidiary of IndianOil on energy infrastructure development in Sri Lanka, including the modernisation and development of the Trincomalee Oil Farm.

Asked about the possibility of a pipeline between the two countries, Mr. Naik said while pipelines were cheaper than other forms of transportation, the cost would have to be commensurate with the benefits arising from such an investment.

Earlier, inaugurating the Lanka IOC, the Minister said India's ``upstream expertise could be progressively harnessed by Sri Lanka in exploring their prospective oil blocks, being in similar geological structure as the Cauvery basin.''

Mr. Naik described the coming together of the two nations in the petroleum sector as an "energy bridge'' that would further strengthen the bilateral ties.

Lanka IOC, IndianOil's first full-fledged venture outside India, is to provide retail and bulk supplies in Sri Lanka.

In addition, it would modernise and operate the Trincomalee Oil Terminal in China Bay, a massive oil tank farm of WWII vintage.

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