Sri Lanka launched a new offshore oil and gas licensing round on Tuesday, formally offering four blocks in the Mannar Basin to international energy companies.

The Petroleum Development Authority of Sri Lanka (PDASL) is inviting experienced international operators to explore and develop the country’s petroleum resources, the Daily Mirror and EconomyNext both reported. The four blocks range in size from 5,689 to 11,728 square kilometres, EconomyNext said, in the basin off the island’s north-west coast.

Energy Minister Anura Karunathilaka said the government was opening four significant exploration blocks in the Mannar Basin and inviting experienced international energy companies to take part, according to EconomyNext. PDASL Director General Neil De Silva said bidding is open to all qualified international companies.

It is the first licensing round held under President Anura Kumara Dissanayake’s administration.

What has already been found

The Daily Mirror reported that exploration carried out to date has confirmed viable natural gas accumulations off Sri Lanka’s western coast, and that developing them is expected to strengthen energy security and support industrial growth.

The most substantial results came in 2011, when Cairn Lanka drilled two wells in the Mannar Basin and discovered natural gas in the Barracuda and Dorado fields. The Indian company withdrew in 2015 on commercial viability grounds despite those discoveries, EconomyNext reported. Exploration off Sri Lanka dates back to the late 1960s.

The two outlets differ slightly on the basin’s headline valuation. The Daily Mirror cites a 2021 parliamentary estimate of about US$267 billion, while EconomyNext puts the potential at around US$260 billion. Both are estimates of resource potential rather than proven, commercially recoverable reserves — a distinction the Daily Mirror makes explicitly.

A round that took years to reach the market

Cabinet approved the licensing round in May 2025, after which the PDASL began marketing the blocks to potential investors. The process was then held up by legal proceedings, which have since been cleared — the step that allowed bids to be scheduled earlier this month.

Sri Lanka legislated a framework for the sector through the Petroleum Resources Act No. 21 of 2021, and gazetted a national policy on natural gas in 2020 setting out how domestic demand would be developed and how operators could commercialise offshore gas.

Neither report gives a closing date for bids, the fiscal terms on offer, or the number of companies expected to take part.

Update: launch ceremony puts the basin at 2 billion barrels

Later reporting on the launch ceremony supplied a resource estimate absent from the morning coverage. Existing geological data indicates the Mannar Basin could hold around 2 billion barrels of petroleum and 9 trillion cubic feet of natural gas that may be recoverable by drilling, Petroleum Development Authority Director General Neil de Silva said, according to Ada Derana and a second Daily Mirror filing. Both outlets carry the same two figures.

De Silva said only a relatively limited part of the basin has been explored, leaving a large area to be assessed with modern survey techniques. Companies entering the round will be given access to the geological data the Authority currently holds.

The four blocks cover close to 34,000 square kilometres in total, both outlets reported — consistent with the individual block sizes of 5,689 to 11,728 square kilometres reported earlier.

The ceremony was held at the Ceylon Petroleum Corporation’s head office auditorium in Dematagoda, under the patronage of Energy Minister Anura Karunathilaka and Dr. Anil Jayantha, who serves as Labour Minister and Deputy Minister of Finance and Planning. The Daily Mirror’s phrasing renders those as two separate people; Ada Derana gives both portfolios to Dr. Jayantha. Also present were Petroleum Development Authority Chairman Prof. Dhammika Thanthrigoda, Ceylon Petroleum Corporation Chairman D.J.A.S. de Rajakaruna and senior ministry officials.

The Daily Mirror gives the round its formal title — the 2026 Sri Lanka Petroleum Exploration Licence Awarding Round — and notes that the actual size and commercial viability of any resource will depend on further exploration, appraisal and successful extraction.

Sources