Production Sharing Agreement, And Its Legal Regulations

LEGAL ALERT: PRODUCTION SHARING AGREEMENT, AND ITS LEGAL REGULATIONS

Activities pertaining to petroleum within the territory of Mongolia are governed by the principle of a Production Sharing Agreement, in accordance with the "Law on Petroleum", the "Procedures for Returning and Accepting Areas for Prospecting, Exploration, and Exploitation of Petroleum and Unconventional Oil" and other applicable legislation. The model for the Production Sharing Agreement, to be executed between the State administrative body and Contractors concerning oil exploration and exploitation activities (hereinafter "PSA model" or the "PSA"), was formally approved by Resolution No. 104 of the Government of Mongolia in 2015. PSA means an agreement signed between the state administrative body in charge of petroleum affairs and the Contractor for the exploration and exploitation of petroleum and unconventional petroleum within the framework stated under paragraph 14 of Article 4.1 of the Law