By IANS,
Colombo : Cairn India Saturday began exploring for oil in Sri Lanka’s northwestern Mannar basin, which is believed to hold over one billion barrels of oil.
Economic Development Minister Basil Rajapaksa told reporters that if the project becomes successful Sri Lanka would no longer need to import oil from other countries.
The Indian company was given the rights to drill three oil wells in Mannar over the next few months. Commercial production was expected to start by 2014.
Cairn Lanka, a subsidiary of Cairn India, signed the Petroleum Resource Agreement with the Sri Lankan government in July 2008 to explore oil and natural gas in Mannar.
It is expected to cost $110 million.
The company contracted a deepwater rig from a Japanese company to embark on the project.
The exploration area is 3,000 sq km with water depths ranging from 400 metres to 1,900 metres, Xinhua reported.