Sinopec Mongolia has been given a letter of intent to drill up to two wells in the country for explorer Petro Matad.
The letter of intenent is subject to completion of all contractual negotiations which are expected to finish soon.
Petro Matad chief executive Ridvan Karpuz said: “We are delighted to have reached agreement with Sinopec on the contractual framework for executing a drilling programme later this year.
“Sinopec has a proven track record of successful operations in Mongolia and fully understands the operating conditions in the country.”
Petro Matad’s announcement to the stock exchange added that their agreement with Bergen Global Opportunity Fund had put the company in a position to fund the drilling campaign.
They are also in farmout discussions with interested parties.