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Rediff News  All News  » Business » Reliance on oil hunt in Lanka

Reliance on oil hunt in Lanka

March 23, 2006 09:50 IST

Mukesh Ambani-controlled Reliance Industries is drawing up plans to invest in oil and gas exploration, production and refining in Sri Lanka.

Seismic surveys have indicated that the island nation has potential reserves of 10-15 million barrels in the Gulf of Mannar and the Cauvery basin.

Sources close to the development said a team led by Atul Chandra, president of Reliance Industries' international operations, visited Sri Lanka last month to study the opportunities there.

"The team expressed keen interest in entering the country in the upstream and downstream sectors. The team met the members of Sri Lanka's Petroleum Resource Development Committee and Board of Investment, and other government officials in Colombo," the sources added.

When contacted, a Reliance Industries spokesperson confirmed the visit but refused to divulge details.

According to the sources, Reliance Industries will participate in an international bidding Sri Lanka will call in the next couple of months for nine oil and gas blocks. Of these, India has requested that one should be reserved for its public sector oil companies.

Although it was not known how much Reliance Industries was planning to invest in Sri Lanka, oil industry sources said it would have to put in about Rs 10,000 crore (Rs 100 billion) for setting up a greenfield refinery and another Rs 5,000 crore (Rs 50 billion) over three years for exploration and production, as the blocks were not developed.

Reliance Industries is also learnt to be keen on a joint venture with state-run Ceylon Petroleum Corporation for oil refining.

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Nevin John in Mumbai