Genie Energy said its subsidiary, Genie Oil Shale Mongolia (GOSM), signed a prospecting agreement with the Petroleum Authority of Mongolia. The new exploration block covers 25,000sq km in Central Mongolia southeast of the Mongolian capital, Ulaanbaatar.
The agreement, the first to be signed under recently passed legislation, also provides a framework under which the company can request a commercial production agreement once a specific suitable resource and location are identified.
Together with its previously signed exploration agreement, GOSM now has exclusive rights to explore for oil shale in approximately 60,000sq km in Mongolia.
“Our analysis of the available geological evidence suggests that this license area may contain world class deposits of thick and rich oil shale well-suited for our in-situ extraction technology,” says Yuval Bartov, chief geologist of Genie oil and gas.
In 2013, Genie and the PAM entered into an exclusive, five-year shale development agreement to explore and evaluate the commercial potential of oil shale resources on a separate 34,470sq km area in Central Mongolia. GOSM continues to conduct an exploratory drilling program pursuant to that five year agreement.
“We are pleased that Mongolia and Genie Energy will be working together to establish oil shale reserves and explore for and exploit the resource,” says D. Gankhuyag, the Mongolian minister of mining. “The recently passed Petroleum Law created a favorable environment for investment in conventional and unconventional petroleum sectors, increasing competition and encouraging sustainable long term activity.”
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