Reuters reported that Chinese oil major CNPC has earmarked half a billion dollars this year for oil drilling in Mongolia, but has so far only made a small discovery.

Mr Temuulen Ganzorig deputy director of Erdenes MGL a Mongolian state company said "Altogether, 26 blocks have been taken by companies including Sinopec and CNPC but the discoveries they've made are minor and are not economically viable to develop."

He said that both Sinopec and CNPC entered into production sharing contracts with Mongolia a few years ago to explore for oil in eastern and southern parts of the country.

The official said the government might open three new oil blocks to foreign companies but he did not provide a timetable.

(Sourced from Reuters)