Oil Options

August 28, 2006 (LBO) – Sri Lanka is trying to terminate an agreement with Norwegian survey company TGS Nopec and buy up three years worth of seismic data on potential oil deposits off the island's coast for 10 million dollars. In an agreement between the government and TGS Nopec signed in 2002, the company would get first option for any seismic work done in Sri Lanka's territorial waters.

"We are evaluating what should be done with the agreement. The government should have the option of doing seismic surveys with other companies if they choose to," Neil de Silva, Director General of the Petroleum Resource Development Secretariat, told LBO on Monday.

The company completed two dimensional (2D) surveys in the deep water Mannar Basin off the Western coast, with the studies completed last year. "We have found the work of good quality," de Silva said.

"We have decided to buy up the entire data from TGS Nopec for a cost of about ten million dollars and cancel the agreement we have with them," A H M Fowzie, Minister of petroleum development, told LBO.

"We have decided to take it over and have written to them about it. The company will be allowed to continue work on the Cauvery Basin but we will take over any balance