Member Info for Adillathehun

As has been discussed the storage tanks are full and the PSA contracts are being reviewed and findings presented to GoM parliament (today I believe).

Normally I would worry that no news means no news but I think clearly MATD plans are contingent on the outcome of the PSA contracts being confirmed or amended..... therefore news will be coming soon.

Some people seem to think Mongolia is like the US where its all about free markets and individual CEO charm. Its not. Mongolia is tied up in red tape bureaucracy with a romantic history of itself as heroic herdsmens blah blah . This is reflected in the way it does business. Mike's hands are tied and dependent on politicians to wade through the shizzle And on Petrochina.

Ive pencilled in 4th July for the next RNS.

There are some posters who dont appear to grasp macro ecomonics

Petro china PSA working group to report to Mongolian parliament week of 20th June. Things should be clearer after that tor Petro Matad.

Hamm. Helps to know how to spell your job though!!!

Anyway as invited by Bowley, if Fair Analyst or anyone has a LinkedIn account they can contact him directly for confirmation that he is our very own poster. This is the public LinkedIn profile link, so it's ok to post here! https://uk.linkedin.com/in/richard-bowley-842ba818

Seemed a reasonable assumption. My bad

I just thought someone so close to the government and the Mongolian oil industry/Petro Matad might be informed on issues affecting the country's biggest oil producer that's all

Bowley can you advise us on the Petrochina working party details then please. Our senior neighbour's issues may well be influencing our current situation.

More likey Petrochina will make an offer?

I struggle to trust an advisor who can't spell the noun "advice" (the verb is to advise but the noun is advice)

My opinion is that we are currently on the back burner whilst the PSA contract issues get ironed out. I hope that it will be clearer after the working party reports circa 20th June and that then we can firm up plans with DQE.

Some background on the review of the PSA. Article dated 19.05.22

At yesterday's Cabinet meeting, a working group was set up to review the production sharing agreement with PetroChina Daqing Tamsag, which has transferred the rights and responsibilities of the PSA to Toson-Uul-XIX and Tamsag-XXI. The working group will be chaired by the Deputy Prime Minister and will be presented to the Government and the National Security Council in 30 days.

In any case, thanks to our articles and programs, the government and the National Security Council have begun to pay attention to the activities of Chinese companies that do not comply with the law.

The Minister of Mining and Heavy Industry made a presentation on “PetroChina Daqing Tamsag's contract and the supply of raw materials to the refinery. There is a need to intensify oil exploration and production. Oil production began in 2012. The highest annual production is 1.1 million tons. The field is planned to produce 1.5 million tons of oil per year. However, this number has been declining recently. The construction of the refinery was estimated to be 1.5 million tons per year, in line with PetroChina Daqing Tamsag's plans to develop the field at the time. During this period, two trillion MNT was transferred to the state budget. Approximately 200 billion MNT has been allocated to the budget in recent years.

PetroChina Daqing Tamsag is operating under a production sharing agreement. We have to understand the position of the Chinese side, because we are going to sit on both sides of the table to sign an agreement. Article 5.2 of the Civil Code of Mongolia stipulates that the terms of a contract shall be valid if the newly adopted legislation is detrimental to the rights and legitimate interests of one or both parties to the contract. "As the refinery is about to be commissioned, we will gradually support PetroChina Daqing Tamsag's efforts to increase production capacity, adhere to field development agreements, and conduct exploration in areas where oil reserves are likely to be discovered."

If you read the Minister's words carefully, it will be understood that the Chinese side is silent on only one provision of our Civil Code when it comes to improving the "Production Sharing Agreement" and bringing it into line with the law. So, the question arises as to why in the past it was not possible to clean up such barriers and make necessary changes for the benefit of the country and the people"

https://news.zindaa.mn/4703

Latest on the refinery...

At the Cabinet meeting on May 18, 2022, a working group chaired by the Deputy Prime Minister was established to review the production sharing agreement with PetroChina Daqing Tamsag LLC and resolve issues related to its renewal in accordance with relevant legislation. The working group met yesterday / June 3, 2022 / and the Minister of Mining and Heavy Industry G.Yondon gave information. He said, “Mongolia first passed the Petroleum Law in 1991 and started conducting exploration. As a result, more than 40 million tons of proven reserves have been discovered. Thus, since 1993, Toson-Uul XIX and Tamsag XXI fields have been mined and exported to China. According to the agreement, Mongolia must receive 40 percent of the total production. However, due to the fact that 40 percent of the total production is deducted by the Chinese side from “Cost Oil” or cost recovery, Mongolia receives only 24 percent of the total production.

Until 2022, Mongolia has exported a total of 9.5 million tons of crude oil. It is also estimated that 1.8 million tons of oil products are imported annually. Therefore, the construction and commissioning of an oil refinery is a priority. ” He also said that there is an urgent need to conduct oil exploration, increase production capacity and build an oil pipeline during the construction of the refinery.

During the meeting, Deputy Prime Minister of Mongolia S.Amarsaikhan made a realistic assessment of the implementation of the agreement with PetroChina Daqing Tamsag LLC. The members of the working group were instructed to study the benefits of government.

https://news.zindaa.mn/47ut?fbclid=IwAR2aiIT8s9zdxoU6uQKb_pbCxLont9P4hR5ont_TxDD3_Wr9Srb0O4XIpsA

Another day and another Commodity skyrockets to fresh record highs. That’s one of the most exciting trends of the current Commodities Supercycle that we find ourselves in right now!

Commodity prices across the board from the metals, energies to agricultural markets started the week on an absolute tear as China – the world’s second-largest economy and biggest importer of Commodities – officially ended a two-month lockdown on June 1.

https://www.fxstreet.com/analysis/commodity-prices-surge-as-china-emerges-from-covid-lockdown-video-202206031125

I think there will be a review and Petrochina will receive a slapped wrist and a fine for environmental breaches and have to make some reparations, which should please the local population . Laws will also get ironed out, with some of the decision making responsibilities taken off locals. Once justice is seen to be done and the financial benefits are clear and fair I think all will be well.

Cleaning up its act maybe?

Mongolia will be the hosting COP17 in 2026

https://montsame.mn/cn/read/297500

Chairman of the Standing Committee B.Battumur and members raised many important issues. One of them is the issue of conflict of interest. Rent a car, pay for children's education, etc. This issue should be investigated by law enforcement agencies. Officials representing Mongolia should not be like employees of the company and carry out assigned tasks. Therefore, it is necessary to pay attention.

This agreement in the mineral sector is not beneficial for Mongolia. There are also serious environmental issues. The technology that sells two liters of water to get one liter of oil will not go any further. Also, 590 tons of chemicals need to be returned. Do not destroy in Mongolia. He said that PetroChina Daqing Tamsag's arbitrary increase in costs, inefficiency and non-payment of taxes should be considered.

Finally, the majority of MPs present at the meeting supported the inclusion of MPs' comments in the draft resolution, according to the Parliament's Media and Public Relations Department.

Sorry. Here is the end of the article
B.Battumur, Chairman of the Standing Committee, said that Mongolia produces 24% of the oil extracted under the PSA. In 1993, we had little knowledge of oil production and markets, and no experience in product sharing agreements. However, there is an urgent need to change the agreement in the interests of Mongolia. The Ministry of Mining and Heavy Industry and the Ministry of Nature, Environment and Tourism were consulted in drafting the Standing Committee. It is reflected in the draft resolution submitted by the ministries. The State Great Hural (Parliament) should take the initiative to increase Mongolia's profits and provide guidance to the Government. The government has also set up a working group chaired by the Deputy Prime Minister. In addition, the technology of using water to produce petroleum products is outdated. In some countries, oil and water have become more expensive. So we have to get rid of the technology that uses two liters of water to produce one liter of oil.

According to the information we received, PetroChina Daqing Tamsag has 554 Mongolian and 320 Chinese employees.

MP Ts. Sergelen said that it would be difficult to determine the next steps to be taken without making a clear assessment of how much Mongolia has benefited in the 26 years since we first signed the PSA. This will require the appointment of a panel of experts, including economists, lawyers, and scholars specializing in international treaties and law. He also said that special attention should be paid to protecting the rights of Mongolian workers, and that these issues, which have a negative impact on the environment, should be investigated and prosecuted.

Member of Parliament N.Naranbaatar expressed his support for the draft resolution of the Standing Committee. He said that in 2025 the refinery will be commissioned. However, there are no raw materials and they have to buy their wealth at the world market price. This must be addressed immediately. There is another issue to consider. There are reports that government officials there have a conflict of interest. They are reported to be hiding the illegal activities of PetroChina Daqing Tamsag and to be linked to the company for business interests. Therefore, the relevant officials of the Mineral Resources Authority and those representing the government need to find out whether they are working to protect the interests of the country and enforce the law.

Members of Parliament to name government agencies responsible for the work specified in the draft resolution, to include the supply of crude oil produced by PetroChina Daqing Tamsag to the new refinery, and to include local representatives in the working group appointed by the Government. was commenting.

Looks like a review of the current law and practices to me? Draft amendments to be presented to Parliament in Autumn