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Subject:  Sri Lanka to Allow Foreign Oil Exploration Date:  7/8/2006  10:48 AM
Author:  pencils2 Number:  1372 of 7325

Sri Lanka to Allow Foreign Oil Exploration

Saturday July 8, 12:20 am ET

Report: Sri Lanka to Allow India and China to Explore Oil Along Its Coast

COLOMBO, Sri Lanka (AP) -- The Sri Lankan government has decided to allow India and China to explore for oil along its coast, a news report said Saturday.

India and China will be allowed to explore two of the six blocks identified for oil exploration off the island nation's northwest coast, the state-run Daily News quoted Petroleum Resources Development Minister AHM Fowzie as saying.

"The proposal received Cabinet approval this week. We will shortly call tenders for exploring the four remaining blocks," Fowzie said.

Sri Lanka, which now imports all of its oil and gas, might be able to produce oil within three years if exploration efforts were successful, according to the Petroleum Resources Development Ministry, which was established in 2005 to help facilitate the country's oil and gas exploration efforts.

The Gulf of Mannar, between the southern tip of India and the west coast of Sri Lanka, has been identified for the first phase of oil exploration, which is likely to begin in August 2007, the news report said.

Fowzie said many countries engaged in the oil trade, including giants Saudi Arabia and Iran, have been told about opportunities in Sri Lanka and have provided technical assistance and expertise for local oil exploration.

In October last year, a Norwegian seismic survey company, after completing a second phase of studies, said there may be oil and natural gas reserves off the west coast of Sri Lanka. An earlier survey had showed the possibility of small hydrocarbon reserves in the northwest Gulf of Mannar.

If any countries will need the oil, India and China are at the top of the list (I think the U.S. is further ahead in the area of alternative fuels, which is why I think we're in a little bit better shape energy wise than India and China). I think India is in a little bit better shape than China because they have had a fairly easy time making exploration/oil partnerships with many companies and corporations. China is starting to become almost desperate to make partnerships in the energy world, it will be interesting to see how they fair in the next five years or so. I would also think the governments would impact the partnerships greatly. India's government is much more open and friendly than China's (From what I've heard), so this allows the process of partnerships and exploration deals go through easier and quicker.

Just a few rambling thoughts...


David K
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