Mongolian Oil Exploration Block MoU signed

Manas Petroleum has signed a MOU with a Mongolian company, Shunkhlai Energy, regarding petroleum exploration in block XXIII. Manas Petroleum has a right to purchase a 90% interest in the Mongolian company, which has won a bidding round for the block XXIII.

Block XXIII is situated in the Gobi desert in the southern part of Mongolia bordering China and totals 18,091 km2 (4.47 million acres) of highly prospective oil-bearing area. Across the border in China (Inner Mongolia Autonomous Region in North China) the Gobi desert is known as one of the major producing regions of China.

Block XXIII is located in this oil bearing province and has multiple oil seeps where reservoir rocks outcrop. The same reservoir rocks are producing oil in Zuunbayan and Tsagaantsav shallow oil fields which are situated in close vicinity to the north of block XXIII.

The oilfields are operated by a Chinese company Dong Sheng, which is a branch of PetroChina, which operates in the north of China and in Mongolia. The two producing oilfields are very shallow (a few hundred metres deep). To the south in China’s Inner Mongolia Autonomous Region is a large natural gas field discovered by PetroChina. The field is currently estimated to contain over 600 billion cubic meters (21.18 trillion cubic feet) of natural gas and 500 million tons (3.6 billion barrels) of oil.