* Sri Lanka to kick off road shows for new exploration
* Sri Lanka expects abandonment won't affect new licences
* Cairn discovered gas, condensate in first two wells
By Shihar Aneez
COLOMBO, March 1 (Reuters) - Sri Lanka kicks off a second
round of bids for licenses to explore for oil and gas off its
northwest coast next week, but expects bidders to be undeterred
by news of an exploration well abandoned by the sole license
buyer in the previous round.
Sri Lanka is in the process of inviting companies to bid for
licences on some of the 13 blocks in the Cauvery and Mannar
Basins off its northwest coast.
Saliya Wickramasuriya, head of the country's Petroleum
Resource Development Secretariat, told Reuters in an e-mail he
did not expect the abandonment of the latest well "to have an
impact on the second licensing round starting next week".
Cairn India's latest abandoned oil exploration
well in Sri Lanka suffered a mechanical problem and its
hydrocarbon potential has not been fully tested, the Sri Lankan
petroleum official said on Friday.
Cairn India, a unit of London-listed Vedanta Resources Plc
, said on Thursday it plugged and abandoned an
exploration well as it encountered multiple thick high-quality
reservoir sands that were not hydrocarbon bearing.
But the well's potential had not been fully tested, said
"We do not feel the hydrocarbon potential of this particular
prospect has been fully tested yet," he said, adding that he
understood the well had suffered a mechanical problem, based on
a statement from Cairn's Sri Lankan unit.
"(This) caused the operator to plug the well for abandonment
prematurely," he added.
Cairn kicked off the well drilling on Feb. 2, after
discovering gas and condensate in two of the three wells drilled
in an earlier phase, though commercial viability has yet to be
Sri Lanka has tried to reinvigorate oil and gas exploration
efforts since the end of a three-decade war with Tamil
separatists in May 2009. The island nation does not currently
produce oil and spent $5.04 billion on imports in 2012.
Earlier seismic work by Norway's TGS Nopec Geophysical Co
ASA showed some potential in the northern Cauvery
Basin, which, on the Indian side, has producing wells, and in a
basin off the island's southern coast.
Sri Lanka has said the seismic data shows the potential for
more than 1 billion barrels of oil under the sea in a 30,000-sq
km area of the Cauvery basin.
Cairn has the rights to drill in one of eight blocks in the
offshore Mannar basin. China and India have been offered one
each, which they are yet to accept, while the remaining five are
expected to be tendered in the upcoming licensing round.
Russia's natural gas monopoly, Gazprom, and
Malaysian state oil company Petronas have held talks
with Sri Lanka on potential exploration, and Vietnam and Sri
Lanka signed a cooperation pact in 2011.