Production Sharing Contract
The main form of petroleum exploration work is considered to be the making of Production Sharing Contract (PSC). Applicants submit an application for negotiation of PSC to the PAM. The PAM evaluates the application assessing the applicant`s experience on petroleum business, financial capability, and basic conditions of PSC like production sharing percentage. After evaluating the applicants, the Contractor is selected and PAM makes agreement on the PSC draft with the Contractor within 60 days. The PAM submits the draft to the Ministry of Mining of Mongolia. The Ministry of Mining of Mongolia examines the draft within 30 days and delivers it to the Parliament of Mongolia. The Parliament of Mongolia makes decision whether to make the contract or not within 60 days. If the Parliament of Mongolia grants the right to PAM, then PAM concludes the PSC with the selected Contractor in 30 days and notifies to the related local government organizations.
The PAM is also open to business entities interested in conducting petroleum geological survey by making Joint Petroleum Geological Survey Agreement (JPGSA) with PAM.
The PAM supervises and monitors the implementation of PSCs, Joint Petroleum Geological Survey Agreements (JPGSA) and other agreements as well as exerts assistance to Contractors in the implementation of the agreements.