Oman to Get Two Blocks in Mannar Basin

By Sulochana Ramiah Mohan | Published: 2:00 AM Oct 4 2021
News Oman to Get Two Blocks in Mannar Basin

By Sulochana Ramiah Mohan

The Sri Lankan Government is to secure a US$ 3.6 billion loan, from the Government of Oman, to finance Sri Lanka’s oil procurements. A Cabinet Paper will be tabled within the next few days for approval to offer two blocks - Block CB 034 to CB42 (formerly known as Block C2) in the Cauvery Basin and Block MB001 to MB011 (Formerly known as Block M3) to the Sultanate of Oman, for joint oil exploration studies, Ceylon Today reliably learns. 

Ceylon Today learns that the loan facility of US$ 3.6 billion for petroleum procurement by the Ceylon Petroleum Corporation (CPC) and the oil exploration move has been discussed between Shumookh International Executive Director Abdullah Al Bulushi, and Minister of Energy Udaya Gammanpila and senior officials. This decision has been reached due to the direct involvement of Minister Gammanpila, Ministry sources said. 

The CPC said the loan interest would be four per cent for the USD 3.6 billion and the petroleum products and crude oil will be priced at the monthly average of Singapore PLATTS.

The Omani business delegation visited Sri Lanka in August and met the President, the Prime Minister, Finance Minister and the Central Bank Governor, State Minister of Solar, Wind and Hydro Power Generation Projects Development, among many others to discuss potential investments in Sri Lanka. 

According to the conditions placed by the CPC in the Cabinet proposal, the CPC had accepted the request of two oil wells for Oman on conditions that the loan borrower will be the CPC and the product specifications deliverable dates and places will be determined by the CPC. 

Also, the CPC said that they would ‘offer Block CB 034 to CB42 (formerly known as Block C2) in Cauvery Basin and Block MB001 to MB011 (Formerly known as Block M3), on the oil exploration map, for joint studies for a period of five years, as the collateral addition to the sovereign guarantee. 

The CPC also placed a condition that if the two oil blocks are found to be of no use, several blocks of a similar extent will be provided for the joint studies within the said period of five years. 

The Omani investor has said a separate fee of 2.25% would be deducted for the loan and the CPC has said such a deduction should be made from the loan (USD 3.6 billion).  

By Sulochana Ramiah Mohan | Published: 2:00 AM Oct 4 2021

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