The Sri Lankan Cabinet has decided to offer India and China, blocks for the exploration of oil off the North Western coast of the island country.
But the Indians are not exactly jumping with joy because a preliminary survey had found that the deposits were not promising.
The state-owned Daily News on Saturday quoted oil minister AHM Fowzie as saying that six blocks would be offered to India and China and tenders would be called soon.
The Gulf of Mannar has been chosen as the area for exploration, which is expected to commence in August 2007.
However, sources in the oil industry told Hindustan Times that after having done some preliminaries, Indians did not find the deposits here very promising.
Nevertheless, Indian oil explorers would consider exploration, they said.
Oil and Natural Gas Corporation (ONGC) officials had visited Sri Lanka and discussed the matter with the previous government led by President Chandrika Kumaratunga, who was pressing for the implementation of the project at the fag end of her term.
According to sources, Indian companies would bid for the blocks in the hope of finding worthwhile deposits.
Companies would not mind putting some money upfront on exploration, as it did not cost much, sources said.