The government of Sri Lanka gas signed a joint study agreement (JSA) with French major Total covering two ultra-deep exploration blocks offshore its east coast.
The study's objective is to explore the two offshore blocks (JS5 and JS6) for hydrocarbons, according to Sri Lanka's Ministry of Petroleum Resources development. In 2014, Total inked a two plus one-year study agreement on the same blocks.
The new JSA will start with a two-year period for data acquisition and for processing and interpretation. If this study is successful, Total has a right to negotiate a production sharing agreement with the government of Sri Lanka, failing which the Government may open the blocks to other bidders, with Total retaining the right to match the highest bidder for a specified period.
In addition, the Sri Lankan government will receive a ground rent of US$1/sq km for the entire acreage of the JSA, valued at about LKR 7 million a year.