This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/22/2019


Oil Exploration:  Sri Lanka has opened an international bidding round to explore and produce oil and natural gas in two blocks in the Mannar and Cauvery Basins. According to the Petroleum

Resources Development Secretariat, the bids for the Mannar Basin's M1 block and its northern
neighbor, the Cauvery Basin's C1 block, will close on July 15, 2019. The M1 and C1 blocks cover 2,779 square kilometers and 2,246 square kilometers respectively.

Based on data acquired from seismic surveys, the government estimates that there are over one million barrels of oil resources in a 30,000-square-kilometer area in northern waters.  The seismic surveys were conducted by an Australian subsidiary of Norwegian firm TGS-NOPEC in 2003 and 2005. 

Sri Lanka's Petroleum Resources Development Secretariat (PRDS) has identified several blocks for offshore oil exploration in the Mannar Basin and the Cauvery Basin.  Based on the initial studies, data and regional studies, the PRDS is estimating the Mannar basin alone could have the potential to generate five billion barrels of oil and nine trillion cubic feet of natural gas, which would be sufficient for Sri Lanka’s energy needs for the next 60 years.  The first exploration license in the Mannar Basin was issued to Cairn India ( in July 2008.  The test wells have produced natural gas, but the company decided to exit oil and gas exploration activities in Sri Lanka in 2015 due to low crude oil and natural gas prices.

In May 2018 the government signed an agreement with Eastern Echo DMCC, subsidiary of a major oilfield services company, Schlumberger, to collect, market, and license petroleum data on a “multi-client” basis, enabling several data acquisition projects, including 2D and 3D seismic, in selected offshore areas around Sri Lanka at no cost to the government.  The main objective of entering into this agreement is to acquire more petroleum data using modern acquisition and processing techniques, and thereby reduce the technical and financial risk of prospective investors in deep water exploration in Sri Lanka and encourage increased levels of investor participation in oil and gas exploration activities.

Oil Refinery and Pipeline:  Sri Lanka’s only refinery and the main port-to-refinery pipeline are in urgent need of upgrading and expansion.  The state-owned Ceylon Petroleum Corporation (CPC), runs the Sapugaskanda refinery and has stated it will invite bids to modernize the existing refinery and to build a new refinery.  Although the government has made multiple announcements on building a new refinery, a project has not yet been implemented.  The CPC expects to increase the refining capacity from the current 50,000 barrels per day to 100,000 barrels per day.  Sri Lanka’s main 5.8-kilometer oil pipeline also needs urgent replacement, and the CPC is evaluating bids for a new oil pipeline including an offer by a U.S. company. 

Leading Sub-Sectors

Refurbishment of oil refinery
Appraisal and development of natural gas discoveries  


The refurbishment of the Sapugaskanda oil refinery is a high priority for the Government of Sri Lanka.  Output from the Sapugaskanda oil refinery meets 40 percent of Sri Lanka’s demand for refined fuels and the government imports 60 percent of the refined fuels consumed domestically.  The Ministry of Petroleum is expected to draft a tender to expand the Sapugaskanda refinery, and has stated they plan to maintain ownership, take on debt to finance the refurbishment, and conduct a public and transparent tender process.

The government is also interested in the construction of a private sector owned refinery that could serve both the domestic market and export market.  The Ministry of Petroleum will consider these proposals on a regular basis (no tender required) and will seek the cabinet’s approval on vetted viable projects.  Companies must secure requisite financing to be a serious contender.  

There will be opportunities to supply equipment and services needed for oil and gas exploration projects. 

The government is offering an international licensing round for the appraisal and development of natural gas discoveries in block M2 of the Mannar Basin.

Web Resources

Petroleum Resources Development        
Ceylon Petroleum Corporation               
Ministry of Petroleum Industries            
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting

More Information

Sri Lanka Oil and Gas Trade Development and Promotion