Potential forMongolia’sOil Industry

Development

PetroleumAuthorityofMongolia
Petroleum Authority of Mongolia
The legal environment of the Mongolian
Petroleum sector
 Petroleum law of Mongolia
 Petroleum products law of Mongolia

 Regulation for implementing the Petroleum

Law
 Production Sharing Contract

 Other relevant domestic laws and regulations

Outline of the Production Sharing Contract

Recommendation National Security

GovernmentofMongolia
Council

Ministryof Mineral Resources

andEnergy
Permission

PSC

PAM,onbehalfof Application
Investors
Government
Current petroleum exploration and
production activities
 Current petroleum exploration and
production activities

 PSC signed – 7 blocks

 Ratified - 3 blocks

 To be ratified -14 blocks

 Joint working group to be established – 1

block
 Open for bidding – 5 blocks
 Current petroleum exploration and
production activities
# Name of the Company Country Block Expiration date for the
petroleum exploration
period

1 “PetroChina Daching Tamsag-Peoples RepublicToson Uul-XIX 2010.01.30

Mongolia” LLC. of China
Tamsag-XXI 2010.01.30
Buir-XXII 2010.01.30
2 “Dong Sheng Petroleum ()” LLC Peoples RepublicPSC 1997 2010.06.14
of China

3 “Petro Matad” LLC Mongolia Matad-XX 2010.07.19

4 “ China Golden Sea ” LLC Peoples RepublicTariach-XV 2012.03.07
of China

5 “Shaman Resources” LLC Canada Nyalga-XVI 2012.06.20

 Current petroleum exploration and
production activities

Exploration activities from 1994 to 2008:

 17584 km 2D seismic work

 5776 km. 3D seismic work

 448 wells were drilled

 US 951.9 million dollars of FDI

 Current petroleum exploration and
production activities
 As of 2008 we have developed 3.1 million barrels
of crude oil.
 Crude oil was exported to the PR of China.
 Following companies have conducted development
and export:
“Dong Sheng Petroleum (Mongolia)” LLC
“PetroChina Daching Tamsag-Mongolia” LLC
 Current petroleum exploration and
production activities
 By 2010:
“PetroChina Daching Tamsag-Mongolia” LLC’s
annual development will reach 420 thousand ton
(3.15 million barrels)
 By 2015:
Annual development will reach 1.5 million ton
(11.3 million barrels)
 Petroleum Downstream Operation

 The Petroleum Products Law adopted in 2005 by

the Parliament.
 The PAM regulates all the activities of the

petroleum downstream industry in Mongolia.

 Statutory law provides enabling legal

environment for the State regulation on

petroleum products
 Petroleum Downstream Operation
Petroleum products import
900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0
2003 2004 2005 2006 2007 2008
 Petroleum Downstream Operation

Petroleum products import structure by country in

2008

Russian
91.83% Federation

China

Korea

0.15% Kazakhstan

0.46% Other

1.60%
5.97%
 Future plans
 To establish refinery plant in Mongolia
 To increase investment and expedite exploration and

evaluation works in the Dornogobi and Tamsag basin

 Within year 2009-2012 to start the evaluation and

appraisal exploration of coal bed methane gas,

establish rough estimates of the reserves, and define
new CBM blocks in Mongolia
 Future plans
 To improve the legal environment of the
petroleum sector through possible
amendment to the relevant laws and
regulations
 To expedite the process of importing crude

oil from third countries and refining