Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
There is another relevant factor which should be considered, namely MG’s 40% initial production share and 5% royalty, under the PSC terms. Given the political sensitivities would MG want to see its share of crude oil produced exported to a refinery in NW China for the next three years until its refinery comes onstream?
Absolutely Master and Rookie. The local authorities will be in no hurry to cooperate with the registration of the area and sign the required contracts for management of the special purpose land. While described by PM as follow-up formalities, this could drag on and on unfortunately.
"PM have apparently signed and agreed revised PSC's with the MG in the IOM" Where did this come from? If the PSC was amended it would have been an annouunceable event by RNS
Hamm
To calculate the P&L impact of H1 production and export to a refinery in NW China, we need to know the price of Russian crude delivered to NW China with which h Heron crude will have to be competitive, then deduct the trucking cost and a facilitation fee to PetroChina, then the impact of the PSC terms, specifically the 5% royalty and the Governments initial 40% production share.
"Gkahn, get lost. The Idiot is you. You were the one crying like a baby and wanted to take legal action against MB. Surely Doc/BP are much better than you sneaky bassttd."
Incredible, I never suggested legal action against MB, provide evidence please
Very good points Thornogson. This raises a couple of important questions: Firstly, what are the economics of trucking crude oil to a refinery in China until such time as the Mongolian re=finery comes onstream; and secondly a related point, applying cash from the early Heron wells, how many wells can be drilled and producing ahead of refinery completion?
Horsers: a question for you. If V1 & V2 are successful and the land-use licence for block XX gets issued in the near future, how much crude oil production do you think can be brought onstream from blocks XX and V in time for the planned refinery start -up?
Absolutely badprophet, It is almost inconceivable now that Mongolia’s domestic oil production will be sufficient for the viability of the refinery when it comes on stream. IMO, the MG may have to defer refinery start-up or else import cheap Russian crude.
I agree badprophet. It seems that nobody on this board has addressed the economics of producing Heron oil and transporting it to a refinery in NW China. I saw a post earlier today postulating a value based on Brent with no consideration for: competition with deeply discounted Russian crude oil delivered to NW China, trucking cost over a considerable distance, the Mongolian government’s 5% royalty, and the 40 % production share for the Mongolian government. And PM meets all operating costs.