COLOMBO (EconomyNext) - Cairn India has withdrawn from Mannar Basin natural gas exploration following the global petroleum price slump, and Sri Lanka is to look for other oil companies to drill deposits found by the firm.
Cairn made known their stance on the Mannar Basin gas during talks with the government in Colombo last month, industry sources said.
"Cairn had indicated they are pulling back from exploration worldwide and want to focus on enhancing oil production from their field in Rajasthan, India," an industry source said.
"Because of the current pressure the oil industry is under, Mannar Basin gas production is not a priority for them."
Oil prices have slumped in recent months prompting oil and gas multi nationals to scale back exploration efforts and postpone investments.
The industry sources said the government was still keen on commercialising the natural gas deposits found by Cairn and had in fact included it in the new 10-year national energy plan of the Ministry of Power and Energy.
"But for us it's a priority and the Sri Lankan government is exploring ways to make that happen," an industry source said.
The government is holding talks with other oil companies to produce gas from the Mannar Basin.
Cairn India itself has offered to help the government find another producer.
In this case it will be able to recover the money it has spent so far on exploration. If not that spending will likely be considered a write-off by the company.
Cairn made known their stance on the Mannar Basin gas during talks with the government in Colombo last month, industry sources said.
"Cairn had indicated they are pulling back from exploration worldwide and want to focus on enhancing oil production from their field in Rajasthan, India," an industry source said.
"Because of the current pressure the oil industry is under, Mannar Basin gas production is not a priority for them."
Oil prices have slumped in recent months prompting oil and gas multi nationals to scale back exploration efforts and postpone investments.
The industry sources said the government was still keen on commercialising the natural gas deposits found by Cairn and had in fact included it in the new 10-year national energy plan of the Ministry of Power and Energy.
"But for us it's a priority and the Sri Lankan government is exploring ways to make that happen," an industry source said.
The government is holding talks with other oil companies to produce gas from the Mannar Basin.
Cairn India itself has offered to help the government find another producer.
In this case it will be able to recover the money it has spent so far on exploration. If not that spending will likely be considered a write-off by the company.
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