Would you please more about Genie’s corporate history and experience? Our corporate head company Genie Energy has been in business for many years. Initially it run its energy business as part of the IDT corporation, American telecommunications company and then it was formed as an individual company in 2008 and started trading its shares on the New York stock exchange.
Genie is the largest provider of electricity and gas in individual customers in Pennsylvania, New York and New Jersey.We are now engaged in oil shale exploration and production operations at 5 locations: in Colorado and Texas, Mongolia and 2 in Israel.
Genie recently entered into a oil shale contract in Mongolia. Could you please tell more about your Mongolia project? “Genie Oil Shale Mongolia” already made with the Petroleum Agency of Mongolia a joint survey contract for oil shale in 2013. This contract allows us to make geological survey over 35 square kms of land in Tuv and Dundgovi provinces. We already spent more than USD $3 mln for this survey. As result of this genie discovered an oil shale deposit with very rich content and quality capable of attracting a global interest.
When in 2012 the Petroleum Agency announced the international Choir-25 petroleum exploration tender, Genie participated in it and was selected the winner. At the time of the selection announcement, the old Petroleum Law was still in effect. But at the time of entering into agreement over Choir-25, the PAM explained to us that according to the new edition of the Petroleum Law, entering into a production sharing agreement was not possible anymore, therefore we recently signed a prospecting agreement and are satisfied with having made it. We already started out prospecting works at the block.
Prior to that prospecting agreement Genie made quite expensive prospecting over 4 years. Any details of the prospecting results? Over those years we had to overcome the deficiency of legal regulation of the unconventional oil exploration in Mongolia while the recent adoption of a new version of the Petroleum Law offers much more comprehensive regulation.
The area we conducted exploration works revealed an oil shale layer of more than 300 meters thick. A quality of rock is measured by its organic content. Although it is premature for us to claim exact numbers, our lab test results show significant high organic contents. The good depth of oil shale layer and its organic content indicate at a possibility of oil production there. Also, oil shale sample’s sulphur content was very little which is another indicator for a good quality oil.
There are much debates go on about environmental impact of in-situ technologies, especially on underground water. What are the features of Genie’s in-situ technology? How you envision Genie’s potential to carry out economically viable production with no negative impact on environment? In US there are various opinions among scientists about fracking the rock with pressurized water and extracting the oil (shale gas, shale oil) and the impact of such technology. But Genie’s in-situ technology is very different than fracking. It utilizes slow and controlled heating of the rock (oil shale) upon on which the oil shall be released. Our technology will require drilling several boreholes in close proximity and inserting a heater underground. When ground is heated, the oil and gas would be released, and we estimate that this type of production shall be an economically sustainable project. The environmental impact assessment was made by reputable professional companies. The land surface shall have no impact at all as concluded by these professionals.
Obviously, we recognize there are concerns of local people with regards to their land and local environment. We clearly understand them. Therefore we suggested to show them our heating process with trial heating of a borehole. If local officials and professionals would conclude that this works, then Genie shall build a smaller scale pilot production facility. Upon proving the our technology’s little environmental impact and if the due permits are given, only then shall start working towards the full scale production. This was our suggestion.
What about water then? Did Genie make water survey? One of clear advantages of our technology is that its production stages do not use water. But still we regularly make hydrogeology studies. Since water is not used during production, there is not issue of the penetration of industrial water into underground water. Small amount of water is used only during the drilling process which is usual for any drilling operations. This water is used for drilling, not oil production.
Thank you for your time. At the end, using this opportunity I would like to express my gratitude to all the people who have been supportive of Genie’s initiatives in Mongolia. With their support and understanding, Genie’s business in Mongolia is succeeding. These are Mining Minister D.Gankhuyag, Director of Staregic policy and planning department of this Ministry Ch.Otgochuluu, Ditrector of PAM G.Ulziiburen, his deputy Ts.Amraa and Director of Exploration division O.Enkhbayar as well Mr. Ganbold, President of Mongolian Oil Shale Association.
N.Ariuntuya: