Sri Lanka and a Indian company (Cairn India Limited) have signed an Petroleum Resources Agreement for the exploration and production of oil in northern Sri Lankan waters in the Mannar basin.
According to the agreement Cairn India Limited will commence its oil exploration activities in Block SL2007/01/001 in the Mannar basin which covers 3400 square km, at depths between 200 to1,800 meters within six months from 5th july 2008.
Cairn expected to expend 112 million U.S. dollars in the next three years for this project.
the company will be allowed up to 65 percent of the revenue to cover its investment, sources says.
The firm has made more than 30 oil and gas discoveries in India during the last 13 years.
The Sri Lankan government will receive a 10% royalty, a 50 million dollar production bonus, the profit share based on the investment, a 15 percent tax on "contractor profit" and other taxes.
the license will be valid till 8 years.
The whole srilanka wait till they found oils.
they says this will reduce the high inflation rates currently occurred because of fuels.