* Two wells hit, third abandoned as a dry hole
* Seismic, drilling exceed commitments in 1st phase
* Five of 8 offshore blocks still not awarded
By Shihar Aneez
COLOMBO, Dec 26 Cairn India said
it intended to start the second phase of oil exploration in Sri
Lanka's offshore Mannar basin after completing the first phase
and successfully discovering gas and condensate.
"Cairn Lanka's successful drilling programme ... has
established a working petroleum system in the frontier Mannar
Basin," Cairn India said in a statement on Monday, referring to
its wholly owned subsidiary in Sri Lanka.
"Following this success, Cairn Lanka has notified the
government of Sri Lanka of its intention to enter the second
phase of exploration," it added.
The company has said it is too early to provide estimates of
the size of reserves discovered and that further drilling will
be required to determine whether they are commercially viable.
The first phase of the exploration programme involved the
acquisition, processing and interpretation of 1,753 square
kilometres of 3D seismic data and a three-well, deepwater
"This programme resulted in two successive gas and
condensate discoveries: the CLPL-Dorado-91H/1z well and, the
CLPL-Barracuda-1G/1 well," Cairn said in a statement on Monday.
It gave no estimates
"The third well, CLPL-Dorado North 1-82K/1, was plugged and
abandoned as a dry hole on 14th December, 2011."
Cairn India said that in the first phase it had exceeded its
commitments in the seismic programme by 20 percent. In the
drilling programme, it exceeded the drilling depth commitment by
50 percent, it added.
Shares in Cairn India closed 1.7 percent firmer on Monday.
The company announcing its success in the first phase just
before the market closed.
ONE OF EIGHT BLOCKS
Last month, the Sri Lankan president's office said the
Barracuda 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.
The Barracuda well is located approximately 60 km off
Indian Ocean island's northeastern coast.
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
whether would be economically viable to drill.
Cairn 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 is expected in early 2012.
Russia's natural gas monopoly Gazprom and
Malaysian 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 in October.
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 revitalise
its $50 billion economy.
(Reporting by Shihar Aneez, editing by Jane Baird)