Mongolia
Block XVI
Block XVI was partially explored in the 1950s by Russian interests and was included in a regional appraisal conducted by BP International for the Mongolian Government in 1990. This work demonstrated that Nyalga has hydrocarbons and the potential to become a significant oil producer. The Russian drilling program reportedly encountered oil shows in 20 of approximately 40 wells drilled to depths of 700 to 1,800 metres; one well flowed oil. The 1990 BP appraisal of central Mongolia's hydrocarbon potential concluded that the Nyalga Basin had the best potential for an active petroleum system among the sites evaluated in the region. In addition, Block XVI contains a large, visible, surface bitumen deposit that is evidence of hydrocarbon generation and migration and requires further evaluation.
Exploration to date has established that the Nyalga Basin possesses many of the characteristics of interior rift basins that produce light oil in Mongolia, east and south of Nyalga, and in northern China. These include: Petrochina's Tamsag project in eastern Mongolia; Sinopec's Zuunbayan project in southeastern Mongolia; and a 980-million-barrel discovery of light, sweet crude oil in the Bameng region of China's Inner Mongolia, announced by a Sinopec subsidiary in August 2009.
The acquisition of Block XVI includes 458 kilometres of 2D seismic data over the Kherulen sub-basin within the Nyalga Basin, including 215 kilometres acquired by PanAsian during the past two years. Based on this seismic data, 19 leads have been identified in the sub-basin's southwestern area. In late 2009 and the first quarter of 2010, the Company acquired 465 kilometres of 2-D seismic over Block XVI, resulting in a total of 925 kilometres of 2-D seismic data over the Kherulen sub basin within the Nyalga basin. The Company is currently processing the seismic data, and following interpretation, locations for its exploratory wells will be selected, with the first well expected to spud in the fourth quarter of 2010.
Mongolia covers an area of more than 1.5 million square kilometres -- more than twice the size of Texas -- and incorporates large sedimentary basins covering most of the country, including the vast Gobi Desert in the south and east. Much of this area, now arid, once was covered by extensive, shallow, inland seas and lush vegetation. Significant coal resources have been discovered and mining and export sales are being greatly expanded.
Oil exploration in Mongolia, utilizing reasonably advanced technology, is only just beginning. Under 70 years of Soviet suzerainty, oil exploration in Mongolia was largely restricted to a limited survey and drilling program in the 1950s. In the early 1990s, a newly independent Mongolia initiated a development strategy that included assessment surveys by BP Exploration, Phillips Petroleum and Western Geophysical. The first production-sharing contracts were issued in the mid-1990s, but increased interest in Mongolian petroleum prospects accelerated with firming oil prices in recent years.
Mongolia
Mongolia covers an area of more than 1.5 million square kilometres -- more than twice the size of Texas -- and incorporates large sedimentary basins covering most of the country, including the vast Gobi Desert in the south and east. Much of this area, now arid, once was covered by extensive, shallow, inland seas and lush vegetation. Significant coal resources have been discovered and mining and export sales are being greatly expanded.
Oil exploration in Mongolia, utilizing reasonably advanced technology, is only just beginning. Under 70 years of Soviet suzerainty, oil exploration in Mongolia was largely restricted to a limited survey and drilling program in the 1950s. In the early 1990s, a newly independent Mongolia initiated a development strategy that included assessment surveys by BP Exploration, Phillips Petroleum and Western Geophysical. The first production-sharing contracts were issued in the mid-1990s, but increased interest in Mongolian petroleum prospects accelerated with firming oil prices in recent years.
Block XVI has a large surface bitumen deposit estimated to contain 25 million barrels of bitumen.
19 drilling leads have been identified in the central part of Block XVI.
