Petro Matad’s shares slumped 13% as the Mongolian oil company warned Covid-19 related travel restrictions in China have severely hampered its operations.
All Mongolian businesses involved in cross-border trade, including those producing oil, are impacted by Covid restrictions, which also ensures no Chinese oil rigs can operate in Mongolia.
"China's zero Covid-19 policy is having major impacts not only within China but also on Mongolia.
“Our preparations to operate are progressing well but, with uncertainty on when drilling operations in country will recommence, we are focusing as a priority on Heron 1 completion and production," said Mike Buck, chief executive.
Petro Matad also said it could advance its Block XX exploitation area without local land use approvals following a directive from the Mongolian government.
The company is now pressing for land certificates on Block XX and Block V and said it will follow a similar strategy with the central government to ensure no impact on already approved environmental permits.