SL contracts world’s largest oilfield services firm to look for hydrocarbon potential

From left: Eastern Echo Holdings PLC Multiclient Eastern Hemisphere Vice President Phil Davey and Petroleum Resources Development Minister Arjuna Ranatunga exchange agreements
Pic by Pradeep Pathirana

By Harshana Sellahewa
Petroleum Resources Development Minister Arjuna Ranatunga yesterday signed an agreement on behalf of the Government of Sri Lanka (GOSL) with Eastern Echo Holdings PLC, a subsidiary of US-based major oilfield services company Schulmberger, giving a new boost for offshore exploration of Sri Lanka’s hydrocarbon potential. 

The agreement was signed by Ranatunga and Eastern Echo Holdings PLC Multiclient Eastern Hemisphere Vice President Phil Davey, with the intention to initiate seismic surveys along the country’s east coast and Mannar Basin, by the end of this year.

The agreement will allow Eastern Echo Holdings to collect, market and license petroleum data on a multi-client basis, enabling an array of data acquisition projects, including 2D and 3D seismic in selected areas around Sri Lanka, initiating with the east coast.

The total investment for this venture is estimated in excess of US $ 50 million and is wholly borne by Eastern Echo Holdings PLC. The company will resort to pre-funding agreements and selling the findings to operators such as Shell or Total to finance the project.

Speaking to Mirror Business, Petroleum Resources Development Secretariat Director General Vajira Dassanayake said, “The total investment is US $ 50 million for seismic acquisition. We encourage companies like Schulmberger to do more seismic acquisitions, so that our database would be modern and more comprehensive.”

Dassanayake further elaborated that a tripartite agreement would be signed between the GOSL, French oil major, Total and an unnamed firm, within the month of June, renewing the existing agreement with Total, which was signed in 2016. 

Overall, the project would provide Sri Lanka with a range of socio-economic benefits, such as enhancement of Sri Lanka’s interpretation and basin modelling capabilities with the provision of training on petroleum systems modelling and interpretation of new data, while accelerating the new licensing process and faster maturation of discovered assets.

It will also enable knowledge transfer to local geo-scientists, access to cutting-edge technology and build in-country expertise in technical, financial and economical modelling areas. According to the Petroleum Resources Development Secretariat, the government will receive a share of the future data sales revenue either in cash or structured competency development programmes/software from Schlumberger as preferred and it will create a platform for the promotion and marketing of local data as well as the hydrocarbon potential globally, through a comprehensive network of major oil and gas companies.