MONGOLIA BEGINS TO ATTRACT OIL, GAS EXPLORERS

Mongolian Petroleum Co. is proceeding with plans to offer more acreage to foreign oil and gas companies. The company is accepting applications through noon Jan. 31, 1992, for nine contract areas in southern and west central Mongolia. It also plans to offer more contract areas in eastern Mongolia next spring. The blocks are expected to be smaller than those presently offered. Mongolia presently has no oil or gas production.

Nov. 11, 1991

2 min read

Mongolian Petroleum Co. is proceeding with plans to offer more acreage to foreign oil and gas companies.

The company is accepting applications through noon Jan. 31, 1992, for nine contract areas in southern and west central Mongolia.

It also plans to offer more contract areas in eastern Mongolia next spring. The blocks are expected to be smaller than those presently offered. Mongolia presently has no oil or gas production.

Western Geophysical Co. is conducting a speculative seismic survey in the East Govi and Tomsauk basins of eastern Mongolia (see map, OGJ, Nov. 19, 1990, p. 27). Acquisition as of Oct. 1 reached 120 line km of a planned minimum of 1,500 line km of data.

Earth Satellite Corp., Rockville, Md., entered a joint venture with Mongolian Geological and Geophysical Exploration Co. last year to develop and distribute detailed geologic information and exploration licenses.

Several companies have purchased Earth Satellite's data on eastern Mongolia. The firm is collecting satellite imagery of central and western Mongolia.

INTEREST GROWING

Several oil companies have made offers for tracts, and more appointments are scheduled during December 1991, said William C. Penttila, vice-president of Exploration Associates International of Texas Inc., Houston.

Springfield Oil Asia Inc., New York City, negotiated with MPC regarding possible work in eastern Mongolia, but the agreement never proceeded enough to delineate specific areas, Penttila said.

Mongolia, an independent country, has accumulated a large debt to the U.S.S.R. and is in the midst of political and economic restructuring aimed at establishing a free market economy and democratic elections.

Funds are scarce, and MPC does not have sufficient capital to explore and exploit its considerable mineral resources. More than 50% of the country's foreign export revenue goes to purchase oil and gas products.

However, 14 countries and five world development organizations agreed this fall to provide about $150 million in emergency aid to Mongolia this year. More aid is expected to be forthcoming in 1992.

The former Area 1, north of Area 2 in northwestern Mongolia, has been withdrawn for environmental reasons, Penttila said.