Economic Times reported that ONGC Videsh, the overseas arm of the state oil explorer has held initial talks with Cairn India for partnership in Sri Lanka, where Cairn drilled successfully to announce the island's first hydrocarbons discovery.

A senior industry source said that "A final decision about how much OVL wants to invest or what kind of stake holding it wants is yet to be taken but what is clear is that OVL is keen to pursue a long-term partnership with Cairn in Sri lanka.”

OVL had submitted a bid with Canada based Niko Resources for the same block in 2008 but was outbid by Cairn India. A source close to Cairn India confirmed that the two companies had begun preliminary talks.

A source close to Cairn India said that "Yes, OVL officials have approached Cairn India to discuss a partnership in our Sri Lanka operations, but the negotiations are at a very initial stage so it is too early to comment right now as formal discussions about the exact nature of the partnership and investments are yet to be ironed out.”

Cairn India operates the largest offshore oil block in India and became the first company to discover oil and natural gas in Sri Lanka's Manna basin in the latter half of 2011. Cairn Lanka, a wholly owned subsidiary of Cairn India, is the biggest private exploration and production company operating in Sri Lanka with an acreage of more than 3,000 km in the frontier Mannar basin. It currently holds 100% interest in the Block SL 2007-01-001 in the Mannar Basin.

Source - Economic Times

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