For the first time ever, the Sri Lankan Government has invited India and China to explore for oil in two of the seven blocks identified for exploration along its sea belt on a “nomination” basis which means that the two nations will not have to bid on tenders. Transport and Petroleum Resources Development Minister A. H. M. Fowzie said that this allotment is a “recognition” the island’s “special relationship with the two countries.”

Lanka is inviting global tenders for the other 5 blocks Indian firms will be eligible to take part in that process also. Fowzie says that global petroleum giants have shown strong interest in the energy sector opportunities in his country as surveys have shown enough gas and petroleum reserves for 20 years with 1 billion barrels of petrol. The Gulf of Mannar had been identified to host the first phase of oil exploration and is scheduled to commence in August 2007. Fowzie revealed that the bidding process for the remaining blocks will commence shortly and will be open till December and results will be announced by March 2008. Lanka is currently surveying more oil deposits potential sites along the sea belt from Puttalam to Hambantota.

Independent analysts say that the Lankan claims on energy potential need validation. So far, results from two surveys are known and the third survey has been placed on hold.