Petro Matad said its long-delayed oil sales agreement with PetroChina is finally up and running, allowing it to export a backlog of crude, while its renewable energy venture continues to build a sizeable pipeline of projects in Mongolia.
But beyond announcing that oil sales had resumed, there was very little to get excited about in today’s update.
The company said PetroChina had confirmed that all outstanding issues were resolved, clearing the way for the export of around 48,000 barrels of stored Block XX production.
Invoices will be processed in September, and PetroChina’s Ulaanbaatar office has indicated it will try to bring payment forward given the long delay.
Until that revenue arrives, Petro Matad said it is managing its cash carefully, which really means it has had to delay a planned blockwide 3D seismic survey and well work at its Heron-2 and Gobi Bear-1 wells.
The company called the move ‘prudent’, but in reality it didn’t have a choice.
Petro Matad also said it still aims to strike a farm-out deal this year, which is likely to keep investors interested.
It reported that five companies, mostly Asian, particularly Chinese, are reviewing its Blocks XX and VII in the data room, with interest sharpened by the disruption to Asian oil supply caused by events in the Gulf.
On the renewables side, the company’s SunSteppe Renewable Energy joint venture has secured development rights to three utility-scale projects totalling 290 megawatts, including a 90 MW solar-and-storage scheme in Ulaanbaatar and two 100 MW projects being fast-tracked by the Mongolian government, both of which have cleared their feasibility studies and construction licensing.
With around 600 MW now in its portfolio, Petro Matad said the venture is well placed to crystallise value from Mongolia’s renewables sector.