Mongolia awards block XX exploitation licence

Mongolia’s Minister of Mining and Heavy Industry has approved the award of the block XX exploitation licence to Petro Matad, only the third such licence ever granted in the country. The licence will run for 25 years, until 1 July 2046, with the option to extend for two periods of five years each.

Development will concentrate initially on the proven reserves area around the Heron 1 well, with early production expected to utilise spare ullage in the nearby PetroChina operated processing and export facilities on block XIX.

The full field development plan will target the 194mn barrels of oil estimated to be in place in the Heron structure, with some 33mn barrels thought to be recoverable. Petro Matad plans to deploy reservoir stimulation technology widely used in the industry but not yet tried in Mongolia, in a bid to improve on this recovery factor and sees a target of 30% or more (equating to a recoverable resource potential of some 60mn barrels) as ‘realistically achievable’.