South Asian Business news and information

Cairn India, won the bid to extract oil and gas from the Mannar basin of Sri Lanka. On July 14^th, an agreement was signed by Mahinda Rajapaksa, President of Sri Lanka and Indrajit Banerjee, Chief Financial Officer and Executive Director, Cairn India.

In a press briefing, Sri Lanka’s Minister of Petroleum and Petroleum Resources Development, A. H. M. Fowzie, told the journalists that in the initial stage, Cairn India will be allowed to take up 65% of the revenue. In this way, the company will be able to procure the money it invested. Sri Lankan government will receive a 10% royalty and $50 million production bonus and 15% tax on contractor profit and other necessary taxes. The profit will be shared based on the investment multiple. The Sunday Times reports:  

Sri Lanka received US$1 million from Cairn India as signature bonus when the government this week signed the Petroleum Resources Agreement for the exploration and licence to dig for oil and natural gas in the Mannar basin.

The press briefing was also attended by other government officials and officials of Cairn India. Initially, Cairn India Ltd. is going to invest $100 million in the project. The oil exploration will start in the next six months and by 2010 the first barrel will be received.

Related article:

The Sunday Times