Cairn India executive director Indrajit Banerjee (right) with chairman (corporate advisory board) Sundeep Bhandari in Colombo on Monday. (AFP)

New Delhi, July 7: Cairn India today signed a petroleum resources agreement with the Sri Lankan government for a licence to explore oil and natural gas in the Mannar basin.

The pact was signed by A.H.M. Fowzie, the Sri Lankan minister for petroleum and petroleum development resources, and Indrajit Banerjee, chief financial officer and executive director of Cairn India, a company release said.

Block SL 2007-01-001, which covers approximately 3,000 square kilometres in water depths of 200 metres to 1,800 metres, was awarded to Cairn India in a recent bidding round in Sri Lanka.

Cairn Lanka Pvt Ltd, a wholly owned subsidiary of Cairn India, has been formed. It will hold a 100 per cent participating interest in the block.

Banerjee said, “The Mannar basin has not been explored and represents a frontier petroleum province. The company has extensive experience in the region and will aim to work with all stakeholders as it sets out on its exploration programme.”

Cairn has been in South Asia for more than a decade. The company has made over 40 oil and gas discoveries in India, including the Mangala onshore field in Rajasthan, which has an estimated oil reserve of 3.7 billion barrels.