Cabinet cheers Cairn’s extra commitment

The Cabinet has on Wednesday approved an amendment to the Government’s agreement on oil exploration with Cairn India which signifies extra commitment on the part of the latter.

The Government said drilling is the most technical and risky aspect of a petroleum exploration programme and drilling locations and drill depths may need changes at short notice due to operational difficulties and emergencies during drilling. “A thorough interpretation of the seismic survey conducted by the company has revealed that changes in the drilling programme is necessary. Accordingly, the proposal made by President Mahinda Rajapaksa to proceed with the changes, was approved by the Cabinet at its meeting,” the Information Department said.

In response to clarification sought Daily FT, Cairn Lanka confirmed that a revised 3-well programme was proposed to the Government as an alternative to the one specified in the Petroleum Resource Agreement.  

“The proposal recommended revising the committed drilling depth of each well to reflect the optimal programme based on the detailed technical evaluation of the of the 1750 km2  3D seismic data acquired in 2010, whilst also continuing to meet the overall commitment. The frontier exploration drilling in the SL 2007-01-001 block off the coast of Sri Lanka is expected to commence in August 2011,” Cairn said.

It also said that a Japanese 5th-generation and technically advanced drill ship has been contracted to drill the 3 wells in the Gulf of Mannar and preparations for the drilling programme are progressing as per plan.