The Upper Cretaceous to Eocene sedimentary succession of the Dorado North exploration well in the Mannar Basin has been studied for paleoenvironment (organic matter richness, its composition, and depositional environment) and petroleum source rock potential. In this study, drillcore cuttings (n = 142) were analyzed using CHNS elementary analyzer. Results indicated that Lower Campanian sediments were depleted by total organic carbon content (TOC = 0.45%), under arid climate. The Lower Campanian to Upper Maastrichtian sedimentary sequence contains organic carbon rich (TOC = 1.64%) terrestrial (C/N ratio = 27.13) sediments. Consequently, this sedimentary sequence can be identified as a good source rock for gas generation. The formation of organic matter rich terrestrial sediments has been linked to sea-level changes and tectonic activities during the Late Cretaceous. Carbonate carbon contents are rich in the Lower Campanian to Upper Maastrichtian sedimentary sequence that indicates diversification of microorganisms under warm climatic conditions. The Paleocene to Eocene sedimentary sequence indicates poor to fair source rocks for possibly oil generation. However, the depositional environment was drastically changed from oxic (Early-Late Paleocene) to anoxic (Late Paleocene-Late Eocene) conditions. Consequently, the Eocene epoch is characterized by weak oceanic circulation in the Indian Ocean under greenhouse climate. In contrast, the deposition of carbonate platforms since the Late Paleocene (CaCO3 = 29.3%) can be related to the northward movement of the Indian plate into warmer tropical latitudes.