Sri Lanka has officially launched a fresh round of offshore petroleum licensing, inviting international energy firms to bid for exploration and production rights in four designated blocks within the Mannar Basin.
According to the government, the initiative follows years of preparatory work and recent resolution of legal barriers that had stalled earlier efforts.
Cabinet green light and global outreach
Officials secured Cabinet approval for the licensing round in May 2025, after which the Petroleum Development Authority (PDASL) began actively promoting the blocks to prospective global investors.
Ongoing legal challenges had held up the process, but authorities confirmed that those obstacles have now been removed, clearing the way for an open international bidding process.
“We believe that the time has come to move forward with great determination and a clear sense of purpose,” Energy Minister Anura Karunathilaka told a news conference in the capital, Colombo, AFP reported.
“The government of Sri Lanka is committed to ensuring that exploration and development of offshore resources are undertaken responsibly, transparently and in a manner that creates long-term value.”
The PADSL announced that the bidding will close in the first half of 2027, after which all submissions will be assessed and qualified operators chosen to move forward.
Selected applicants will be granted exploration rights through formal Petroleum Resources Agreements, paving the way for seismic surveys and exploratory drilling to commence.
Decades of exploration and new regulatory framework
The push to develop offshore resources stretches back to the 1960s, with significant progress recorded in 2011 when Cairn Lanka discovered commercially viable natural gas accumulations in the Barracuda and Dorado fields.
A solid regulatory foundation is now in place through the Petroleum Resources Act No. 21 of 2021, complemented by a national gas policy issued in 2020.
These instruments outline strategies to boost domestic supply and create commercial pathways for offshore discoveries.
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Mannar Basin’s multibillion-dollar potential
Estimates presented to Parliament in 2021 placed the Mannar Basin’s total hydrocarbon potential at roughly USD 267 billion, though officials noted that this represents resource prospects rather than proven, economically recoverable reserves.
Authorities expect successful exploration and eventual production to significantly strengthen national energy security while supporting broader industrial expansion.
Confirmed natural gas deposits already identified off the western coast underscore the basin’s promise, positioning the licensing round as a pivotal step toward unlocking the island country’s long-term energy and economic potential.
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Geoffrey H. Latayan