Gazprom to support Lanka’s oil quest

http://www.sundayobserver.lk/2011/06/19/new02.asp

Gazprom to support Lanka’s oil quest
by Shanika SRIYANANDA
Russia’s biggest energy company Gazprom, one of the world’s largest natural gas extractors, has agreed to support Sri Lanka in oil exploration off the Mannar coast and also to enhance facilities in oil refineries.
Gazprom Chairman Alexei Miller announced the company’s willingness to carry out oil exploration in the Mannar Basin when he met President Mahinda Rajapaksa at a meeting held at the St. Petersburg International Economic Forum, Presidential media sources said.
Sri Lanka has eight oil and gas exploration blocks in the Mannar basin, estimated to contain deposits of one billion barrels of oil. Cairn Lanka, a subsidiary of an Indian company is already exploring for oil in the area.
Miller said the company would send a group of experts to Sri Lanka for a feasibility study on oil exploration. Gazprom, which was formed in 1989, is involved in geological exploration, production, transportation, storage, processing and marketing of hydrocarbons. It is also engaged in generation and marketing of heat and electric power.
Gazprom is to explore the possibility of promoting LNG (Liquid Natural Gas), which is cheaper than thermal and hydro-based power generation, in Sri Lanka.
He said the Gazprom expert team would also look into this matter. The company is renowned for supplying natural gas to Russia.
The company accounted for 10 percent of Russia’s Gross Domestic Production in 2008, producing 549.7 billion cubic metres (BCM) of natural gas, amounting to 17 percent of the world gas production. In addition, the company produced 32 million tons of oil and 10.9 million tons of gas condensate.
Miller has also assured to set up an oil refinery in Sri Lanka at the discussion.
This is not the first time that Russia has helped in Sri Lanka’s attempts at striking oil. The then Soviet Union recorded 4,837 km of marine seismic data from 1972 to 1975 along with some onshore data to evaluate the Palk Bay area in the Cauvery Basin under an agreement with the Sri Lankan government.
Sri Lanka, which produces no crude oil at present, imports crude oil, spending around US$ 700 million a year.