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Cairn India finds natural gas in 2nd Sri Lanka well

Cairn India finds natural gas in 2nd Sri Lanka well
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First Published: Mon, Nov 14 2011. 04 26 PM IST

Photo: Bloomberg
Photo: Bloomberg
Updated: Mon, Nov 14 2011. 04 26 PM IST
Colombo: Cairn India has discovered natural gas in a second exploration well in Sri Lanka’s offshore Mannar basin, but more drilling will be required to see if the deposit is commercially recoverable, the Sri Lankan president’s office said on Monday.
The Barracuda 1/G1 well, drilled to a depth of 4,700 metres (15,400 feet), had three petroleum-bearing formations with gas and an indication of liquid hydrocarbons, it said in a statement.
Photo: Bloomberg
In October, Cairn India informed the government that it had found natural gas in its first well, the first hydrocarbon discovery in Sri Lanka, but said it was too early to determine if it would be economically viable to drill.
The Barracuda well is located approximately 60 km off Indian Ocean island’s northeastern coast. Cairn had no immediate comment but a spokesman said a statement was expected shortly.
Cairn India, whose shares rose 1.14% on Monday, has rights to drill in one of eight blocks in the Mannar Basin. China and India each have one, and the remaining five are expected to be tendered after Cairn’s exploration campaign is completed, which it anticipates in early 2012.
Russia’s natural gas monopoly Gazprom and Malaysia’s state oil company Petronas have held talks with Sri Lanka on potential exploration, and Vietnam and Sri Lanka signed a deal on oil and gas cooperation last month.
Gazprom is expected to send a team of geologists to assess the available seismic data to determine whether it will engage in exploration.
Seismic work done earlier by Norway’s TGS Nopec Geophysical Co ASA showed some potential in the northern Cauvery Basin, which on the Indian side has producing wells, and in a basin off the island’s southern coast.
Cairn’s well is the first drilled in three decades. There were signs of oil and gas finds in the 1970s, but the breakout of violence onshore with Tamil militants which erupted into a 25-year civil war halted any exploration efforts.
Sri Lankan forces defeated the Tamil Tiger separatists in 2009, and the Indian Ocean nation is on a campaign to revitalize its $50 billion economy.
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First Published: Mon, Nov 14 2011. 04 26 PM IST