India is persuading Sri Lanka to allocate oil exploration blocks in the waters that separate them as it considers the location too strategically important to allow companies from other nations to base themselves in this area.
Diplomatic sources said the two countries were trying to set up a meeting between the Petroleum Ministers this month to discuss the issue, now that Cairn India has struck oil in one of the blocks.
After the war with the LTTE ended in 2009, Cairn, which was allocated a block two years earlier, was encouraged by New Delhi to take up exploitation in earnest.
India plans to step up its efforts in view of the international interest in the area after the war ended.
Russian, Vietnamese and Malaysian companies have held meetings on the subject with senior Sri Lankan officials while China has also expressed its desire to get involved.
India is also keen to take up exploration in the Cauvery basin.