Peter Baillie, P. M. Barber, Ian Deighton, Paul A. Gilleran, W. A. Jinadasa, R. D. Shaw
Indonesian Petroleum Association
Volume , Pages 533 - 545 (2004)
Petroleum Resources Development Secretariat (PRDS) - Sri Lanka
Sri Lanka Will Seek Bids for Oil Exploration Licenses, April 5, 2007
Potential Shale Gas Basins of India Possibilities & Evaluations
Potential Shale Gas Basins: Cambay, Assam-Arakan, Gondwana, Vindhyan, Rajasthan, Bengal, Krishna-Godavari, Cauvery
Prospectivity of Cauvery Basin in Deep Syn-rift Sequences, SE India
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27 May 2011
Cairn India to drill first offshore well in the Mannar Basin in August
27 March 2011
Drilling for oil in Mannar Basin begins in July
18 Feb 2011
Sri Lanka ready to nominate OVL for oil and gas blocks - update
24 January 2011
Sri Lanka Oil Exploration in Mannar Basin on Schedule. Tenders for more Blocks by End January
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Petroleum exploration in Sri Lanka began approximately 40 years ago in late 1960s. In 1967-68 Compaigne General de Geophysicque collected approximately 420 km of onshore and 75 km of offshore seismic data on behalf of the Ceylon Petroleum Corporation (CPC or Ceypetco). The Soviets, with their increased interest in South Asia in the 1970s, recorded 4837 km of marine seismic data in 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. In 1974 Soviets spudded Pesalai 1 on the Mannar Island and drilled to a TD of 2594 m to pre-Cambrian gneiss basement. The well encountered a water-bearing basal Lower Cretaceous sandstone with a small amount of dissolved gas with heavy ends to pentane. Encouraged by the gas show in Pesalai 1, Soviets drilled two more wells nearby, Pesalai 2 and Pesalai 3, but both failed to encounter significant reservoir rocks or a trap. This led to withdrawal of the Soviets from the area.
In 1975 CPC engaged Pexamin Pacific as a consultant to promote exploration in the Sri Lankan portion of the Cauvery Basin. In 1976 Western Geophysical recorded 1947 km of 2D seismic data around the island. Western Geophysical also collected 2829 km of seismic data in Palk Strait and the Gulf of Mannar in 1976. Subsequently, Pexamin Pacific signed a contract with CPC for an offshore exploration block.
Marathon Petroleum farmed into Pexamin's interest in 1976 and drilled two exploratory wells, Palk Bay-1 and Delft-1 in the Cauvery Basin, both targeting horst block plays. Both failed to encounter any hydrocarbons and in 1977, the Marathon -Pexamin group relinquished its interests.
In 1981, Cities Services acquired interests in the Cauvery and the Mannar basins and collected a total of 1556 km of seismic, 1289 km in the Gulf of Mannar and 267 km in Palk Bay. The same year Cities Services drilled Pearl-1, located on the northeast shelf of the Gulf of Mannar. This well was drilled to total depth of 3050 m with no oil and gas shows. The well bottomed in a volcanic sill and is the only well on the Sri Lankan portion of the Mannar Basin to date. On the positive side, the well penetrated an 850 m thick Late Cretaceous basal sandstone unit thereby establishing the presence of significant reservoir rocks in the Mannar Basin.
About the same time ONGC made the PH-9 discovery approximately 30 km north of the India-Sri Lanka maritime boundary in the Cauvery Basin. Encouraged by this discovery Cities Services drilled Pedro 1, the most northerly exploration well in the Sri Lankan waters. The well was drilled to a total depth of 1437 m and failed to encounter any hydrocarbons.
In 1984 under a tripartite agreement between Phoenix Canada Oil Company, Petro-Canada and CPC, Petro-Canada acquired 980 km of 2D seismic data in the Mannar Basin. This is the first comprehensive seismic program in the Mannar Basin. However, no further work was done and by 1984 petroleum exploration work offshore Sri Lanka came to a halt and remained dormant till 2001.
In 2001 under a contract from the Asian Development Bank to evaluate the petroleum potential of Sri Lanka as well as its petroleum administrative and fiscal regime of the University of New South Wales (Newsouth Global Pty Ltd) provided an interpretation report and draft petroleum legislation and a Petroleum Resources Agreement. The latter was coined after the Indian Production sharing Contract (PSC) at that time. Encouraged by the report of the Newsouth Global, TGS NOPEC, a Norwegian seismic contractor with a regional office in Perth, Australia, approached CPC to undertake a speculative seismic program in the Mannar Basin. In 2001 CPC and TGS NOPEC signed an agreement to collect 1100 km of 2D seismic data in the Mannar Basin. The data was acquired in June-July 2001 and a detailed interpretation report was produced by Newsouth Global in 2002 (Newsouth Global 2002) under contract to TGS NOPEC. The report highlighted the petroleum potential of the Mannar Basin and encouraged TGS NOPEC to collected additional 4600 km of seismic in the basin 2005. These two TGS NOPEC data acquisitions provide a modern, high quality 2D seismic data set in the Mannar Basin for exploration companies interested in the area.
From 2002 to 2006 the Government of Sri Lanka and TGS NOPEC made attempts to attract exploration companies to Sri Lankan through road shows at various venues. These efforts were unsuccessful. In 2007 under a Cabinet Decision the government of Sri Lanka bought the Mannar Basin 2D data from TGS NOPEC thereby canceling the exclusive rights that TGS NOPEC had to collect seismic data in the territorial waters of Sri Lanka. Based on this data the Mannar Basin was divided into eight exploration blocks ranging from 3340 to 6640 sq. km. The Government of Sri Lanka offered the very northern block to the Government of India and the very southern block to the Government of China under previous pledges made by governments. Out of the six remaining blocks the Cabinet of Ministers decided to offer three for petroleum exploration under an international licensing round.
In 2007 September the Petroleum Resources Development Secretariat under the Ministry of Petroleum and Petroleum Resources Development launched the Mannar Basin Licensing Round for three exploration blocks in the Mannar Basin. An extensive marketing campaign was carried out globally with road shows and data rooms in London, Houston and Kuala Lumpur. These efforts were successful in the sense that bids were received for all three blocks with three bids for Block SL2007-01-001, two bids for Block SL2007-01-002 and one bid for Block SL2007-01-003). The Cabinet of Ministers decided that the number of bids received for blocks 002 and 003 are not enough and thus directed the Ministry to evaluate only the bids received for block 001.
The bidders for Block 001 in the Mannar Basin licensing Round consisted of Cairn India Limited, Niko Resources (Cyprus) Limited and Oil and Natural Gas Company of India (ONGC). The bids were evaluated by a technical evaluation committee (TEC) and a Cabinet appointed negotiation committee (CANC) who selected Cairn India Limited as the winning bidder on the basis of the work commitments and fiscal provisions in the bids. On July 07, 2008 the Government of Sri Lanka, through the Minister of Petroleum and Petroleum Resources Development signed a Petroleum Resources Agreement with Cairn Lanka (Private) Limited marking the beginning of petroleum exploration of Sri Lanka after a hiatus of 25 years.
Petroleum Potential Offshore Sri Lanka
Even though no oil and gas accumulations have been discovered in the Mannar Basin or in the part of the Cauvery Basin that lies within the jurisdiction of Sri Lanka, discoveries on the Indian side of the Cauvery Basin give clues to the potential for viable petroleum systems offshore Sri Lanka. Exploration efforts in the Cauvery Basin within Indian jurisdiction have resulted in twenty six small and medium sized oil and gas fields with a total resource of approximately 700 million barrels of oil equivalent (Babu and Lakshmi 2004). The closest discovery to Sri Lanka is the PH-9-1 well some 80 km to the north of the island. The well has flowed 1488 barrels per day of 56 API oil from a Cretaceous sandstone on drill stem testing.
The most recent discovery was when in July 2007 Reliance Industries Limited announced the first deep water discovery in the region from an exploration block on the Indian side of the Cauvery Basin, 'Dhirubhai - 35'. The well was drilled in a water depth of 1,185 meters and encountered a clastic reservoir with a gross hydrocarbon column of around 150 m of Cretaceous section. The presence of oil and gas with condensate was confirmed by several tests. During drill stem tests (DST) the well has produced 31 million standard cubic feet of gas with 1,200 barrels of condensate per day from the main zone. Another zone tested below the main zone produced around 550 barrels of oil and 1 million standard cubic feet of gas per day. The well showed that not only the shallow water area but also the deep water area off south India and Sri Lanka could have viable petroleum systems.
Magoon and Dow (1994) defined a petroleum system as the essential elements and processes as well as all genetically related hydrocarbons that occur in petroleum shows, seeps, and accumulations whose provenance is a single pod of active source rock. United States Geological Survey in their 2000 assessment of the world resources introduced the term Total Petroleum System (TPS). The TPS consists of the essential elements (source rock, reservoir rock, seal rock, and overburden rock) and processes (generation-migration-accumulation and trap formation) as well as all genetically related petroleum that occurs in seeps, shows, and accumulations, both discovered and undiscovered, whose provenance is a pod or closely related pods of active source rock (USGS 2000). The TPS is a naturally occurring hydrocarbon-fluid system that can be mapped, and includes the essential elements and processes needed for oil and gas accumulations and presumes the existence of migration pathways, either now or in the past, connecting source rocks with reservoirs and traps
In assessing the total petroleum system in the Cauvery Basin and the Manner Basin one has to determine the possibility of source rocks, reservoir rocks, traps and generation and migration pathways for hydrocarbons to move from source to traps. Source rocks are rocks that contain organic carbon (kerogen) capable of producing hydrocarbons upon undergoing burial in a sedimentary basin. Kerogen is made up from altered remains of marine and lacustrine microorganisms, plants and animals. Upon burial, source rocks get heated up under the geothermal gradient in the region and produces hydrocarbons. The oil and gas production begins at 50° and ends at 150° C with peak oil production around 90° C. Reservoir rocks are rocks with gaps between different grains that make up the rock. These rocks have porosity and permeability so that oil and gas can pass through them or reside in them. When a reservoir rock containing petroleum meets an impermeable rock the oil and gas cannot move any further and get trapped. This way oil and gas can get accumulated in underground pockets where rocks have been faulted or folded creating traps where the reservoir rocks are capped by or juxtaposed against impermeable seal rocks.
Many source rock analyses have been conducted on cuttings from wells drilled in the region which suggest that good quality source rocks occur in the Lower Cretaceous and Jurassic rocks in the Cauvery and the Mannar basins. Especially the Lower Cretaceous rocks in the Pesalai wells seem to have high organic carbon values averaging 3.5 weight percent. However, the samples analyzed are mostly immature as the previous wells have been drilled on structural highs. This may be the reason that the previous wells in the area were dry. Modeling studies (Newsouth Global 2002) have indicated that the source rocks would be in the oil generating window in the deeper parts of the Cauvery and the Mannar basins.
Results from previous drilling indicate potential for good reservoir development in the area. The Pearl-1 well encountered an 850 m thick, good quality Late Cretaceous sandstone reservoir. Seismic data indicate possible development of both shallow marine and deep water submarine channel and submarine fan reservoirs in the area. Late Cretaceous and Tertiary limestone and shale intervals are present to provide adequate seal rocks.
Seismic data reveal a number of large anticlinal closures (traps) that can be interpreted as flower structures associated with northeast trending transfer faults. These faults can be traced to transform faults related to the mid ocean ridge in the Indian Ocean east of Madagascar. Minor faulting and fracturing associated with these large transfer faults would have provided ample pathways for oil and gas produced from the source rocks in the oil window to move into shallower reservoirs and traps. Large oil fields with billions of barrels of oil reserves have been found under similar structural setting offshore Brazil associated with transfer faults
As indicated above the essential elements of a petroleum system include source rock, reservoir rock, seal rock and processes such as hydrocarbon generation, migration-and accumulation and trap formation. Available data and discoveries in the region indicate that the Mannar Basin and the Cauvery Basin offshore Sri Lanka could have viable petroleum systems. This needs to be proved by drilling and until then we only know that there is only potential for oil and gas accumulations in the area. In quantifying this potential, the chance of an adequate source of oil and gas (mature good quality source rocks and migration pathways) could be estimated at 75%, the presence of adequate reservoir rocks in the basin could be estimated at 80% and the possibility of traps could be 100%. Therefore the chance of finding hydrocarbon accumulations may be estimated at (0.75 x O.8 x 1) 60%.
Legal & Land - MAPS & CHARTS
PRDS - PUBLICATIONS - The current status of oil exploration in Sri Lanka and future opportunities. CCI Bulletin, July 2008, P. 11.