Cairn Lanka, a fully owned subsidiary of Cairn India, said on Thursday it had started a $100 million seismic survey off Sri Lanka's northwestern coast to explore for crude oil.
Cairn India, a unit of Britain's Cairn Energy Plc, said it expects to complete the 3D data acquisition by March, and commence drilling in the first half of 2011.
Sri Lanka has said previous seismic data had showed the potential for more than 1 billion barrels of oil under the sea in the Mannar Basin, though no reserves have yet been proven.
"While there are no guarantees of success when exploring, the Mannar basin...is under-explored, and we are encouraged by the studies we have conducted to date," Indrajit Banergee, director at Cairn Lanka said.
Sri Lanka has awarded one of eight blocks to Cairn, with an area of 3,000 sq km. The island nation gave one block each to India and China in 2007, but neither of the Asian giants have responded positively so far.
"I think they are waiting for Cairn to find oil first," petroleum minister AHM Fowzie told reporters. "We are also considering to call a tender for another two or three blocks in the near future."
If proven, the reserves would be a boost for Sri Lanka, which produces no oil and imported $3.4 billion worth in 2008.
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