Mongolia to the Rescue

A Mongolian oilfield discovered nearly ten years ago may prove more fruitful than originally expected, prompting calls for a pipeline linking it to northern China.

The UK-based Soco International oil company said it had drilled four exploration wells in the Zuunbayan field, at the northeastern tip of Mongolia, during 2003. It said it had found significant reserves of a higher quality and greater predictability than was previously known in the area.

"We've discovered oil in a much better reservoir, at a shallower depth than the previous wells and one which we think we'll be able to predict with much greater certainty where to drill in the future," Soco International's president and chief executive Ed Story said in an interview.

"The key in what we've been about is to get enough quantity, proven reserves, to then go forward to build a pipeline so you can move larger quantities to sell to China," Story said, adding that Soco and its Chinese and Vietnamese partners had long had an eye on the China market.