Canoel International Energy Ltd. entered into an Agreement to become the operator of a large oil exploration block in Mongolia, which is located in the Mongolian part of the Gobi desert, immediately north of the boundary with China. It covers 13'575 square kilometres (about 3.37 million acres).
Hans Oesterle, Vice President for Exploration says: "Preliminary work identified several large structures in Block XXIII under major regional thrust faults. These leads need to be verified by modern seismic data; but the current size of the mapped structures is such that any discovery will be of significant size. Future production will satisfy local requirements, but surplus production can be transported by railway to the Chinese refinery at nearby Dong Wu".
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