Petroleum product sharing contracts and new ventures department strictly follows the “Intensifying oil exploration activities and increase production output” article of the Government action plan in its daily operations.
The department highly recognized and pursued policies of promoting oil and natural gas reserves of Mongolia, oil exploration areas among domestic and foreign investors, promoting the advantages of investing into this sector, increasing the interests through interpreting the legal environment appropriately, conducting these promotions within tight cooperation schemes, receiving and assessing applications related to oil exploration in accordance with Oil law and respective regulations. The sample of the product sharing contract has been renewed and introduced to the Ministry of Industry and Commerce.
Oil companies from China, US and Canada are conducting oil exploration and production activities on totally 5 contractual areas under the spirit of product sharing contract principles.
Explorations had been actively pursued. Totally 200339.5 barrels of crude oil were extracted in 2005 from Dornogobi aimag and Tamsag areas, from which 187900.5 barrels were exported.
The total volume of oil exploration and export is given in the following graph, where explorations increased by 1.3 percent and export by 3.5 percent respectively compared with the numbers of previous year.
In 2005 the department had negotiated terms and conditions of the product sharing contracts and concluded them with Mongolian “Petro Matad” company on 20th oil area, “China Golden Sea Petroleum Exploration Corporation” company on 15 Block, and Canadian “Shaman Resources” company on 16 Block. These contracts are currently sent to Ministry of Industry and Commerce for approval.
According to estimates, in overall 185.4 million USD investment was made into oil industry during the period from 1993-2005, from which “SOKO” (Datamo) company invested 103 million USD, “Donshen oil” (Mongolian) company invested 81.6 million USD, and “Storm Kat Energy” company invested 1.4 million USD respectively.
Following tasks are planned for implementation in increased petroleum exploration and production in 2006.
o Intensify oil exploration works and increase production hot less than by 7 percent from the previous year value
o Actively encourage domestic and foreign investments, commence the implementation of the above-mentioned 3 product sharing contracts in 2006 upon and after Government’s ratification
o With the scope of the “Foreign investors forum 2006” activity, organize oil sector sub-meetings during forthcoming September
o Organize an executive committee meeting of the “Natural gas pipeline forum of the North East Asia” during August 2006 in Ulaanbaatar
o Make necessary improvements into legal environment of oil exploration sector, for instance make respective amendments into Land law and its observance regulations
o Celebrate oil sector day, directed at promoting this sector and publicizing its activities.
Entry filed under: Crude Oil.