Petro Matad’s assets are located in remote locations in Mongolia. In this operating environment, it is essential to have a fit for purpose environmental strategy that cultivates and implements an environmental awareness culture not only within the company but with the contractors involved with our projects and activities.
The preservation and protection of the environment where we operate is a top priority for us.
Commitment to Environment
We address environmental protection proactively in all our operations. Within our Environmental Management Plan, we implement site monitoring twice a year on our exploitation block and prior to the commencement of any field programmes where we are exploring and apply the recommendations of the Detailed Environmental Impact Assessment which is approved by the Ministry of Environment and Climate Change.
Detailed environmental and cultural sensitivity field studies by specialist consultants have been commissioned in our areas of operations to address the concerns of local communities, to ensure legal compliance when working near protected areas and to minimize all adverse environmental impacts.
The results of these studies are used to finalize the operational Environmental Management Plan which includes interactive constraints maps. In areas of potential sensitivity, sites are revisited and surveyed to manage any potential environmental, archaeological or cultural conflicts. These visits involve environmental and cultural specialists, together with local environmental officials and a senior member of our technical team. We strive to remediate all operational areas wherever necessary.
An Environmental Implementation Report is required to be submitted at year-end which serves as a record of implemented environmental protection measures, mitigation strategies, and monitoring activities specified in our Environmental Management Plan and Detailed Environmental Impact Assessment. The report typically includes data and documentation on environmental monitoring results, waste and emissions management, rehabilitation progress, compliance with regulatory conditions, and any incidents or deviations from the plan. It aims to ensure transparency and accountability to both local authorities and the Ministry of Environment and Climate Change, demonstrating effective management of the environment. We are pleased to report that the Dornod Aimag Environment Committee awarded Petro Matad an overall score of 96.4% on Block XX for our first full year of production operations, which demonstrates the company’s strong compliance in our field operations.
We continue to review new technologies that will reduce our overall operational carbon footprint which will improve operational performance and reduce potential harmful emissions into land, water and air.
The Company’s Environmental Department continues to evaluate more environmentally sustainable methods for treating and restoring drilling mud sumps. In 2025, a pilot remediation study was funded to assess a range of biological treatment options, including microbial products and phytoremediation. However, these methods failed to achieve the required remediation objectives. The study concluded that bioremediation was not a viable solution for restoring the drilling mud sump under the tested conditions.
Despite these findings, the Company remains committed to identifying and implementing improved mud sump remediation techniques that offer a higher environmental standard than the conventional stabilization and burial methods currently practiced in Mongolia. We continue to engage with technical experts, research institutions, regulators, and technology providers to evaluate alternative treatment and recycling solutions that may offer better long-term environmental outcomes.
We also place strong emphasis to the training of employees and contractors, recycling and waste management, spill prevention, water source management and environmental restoration.
One Billion Tree Campaign
Since the announcement of the President of Mongolia’s One Billion Tree Campaign 2021, the Company has made contributions to national reforestation efforts in the communities where it has operated. In 2025, Petro Matad initiated planting of another 500 tree saplings in Matad Soum in close collaboration with local residents and students, whose participation was crucial for site preparation, planting, and initial watering activities. Their involvement not only fostered a sense of community ownership but also encouraged environmental stewardship at the grassroots level.
The planting site was selected in consultation with the Matad Soum Governor’s Office to ensure it aligned with local land use priorities and community development plans. In collaboration with local forestry experts, native and drought-resistant species were chosen to enhance survival rates and ensure ecological compatibility with the region’s steppe and semi-arid conditions.
The Company is dedicated to monitoring the growth and survival of the saplings through regular site visits and maintenance efforts, in partnership with the Matad Soum administration. Ih 2025, a focused training on proper planting techniques and seasonal care was held in conjunction with an expert. The company will continue tree-planting efforts in other areas of Dornod Province, reinforcing the company’s long-term commitment to environmental sustainability.
Environmental Offset Plan
The Environmental Offset Plan, also known as the Compensatory Protection Plan, is a mandatory component of the Detailed Environmental Impact Assessment in Mongolia for exploitation areas. Its primary aim is to address any residual environmental impacts, especially on biodiversity and ecosystems—that cannot be entirely avoided, minimized, or restored through direct mitigation measures. Offset plans consist of a structured package of actions undertaken annually outside the immediate project footprint. In close collaboration with the Environmental Department of Dornod Aimag, for year 2025, the Company funded the manufacturing, installations, and servicing of signage and informational boards around the protected area in Dornod Province. These efforts will raise environmental awarenes, guide sustainable access, and enhance enforcement by clearly marking the area’s protected status.
Air Quality
The nature of the company’s activities has the potential to pollute the atmosphere, which underscores the importance of controlling and reducing emissions to avoid and minimize the potential damaging effects on the environment and human health. Procedures are in place to ensure machinery and equipment are stringently serviced and maintained to reduce pollutants. Transportation and logistical plans are constantly reviewed to reduce carbon emissions. The connection of the Heron-1 production wellsite to the power grid has also enhanced the Company’s environmental performance by reducing carbon emissions and the overall environmental footprint of operations.
Environmental Activity
The Board of Petro Matad in 2021 took the decision to expand the company’s activities in Mongolia into sustainable and renewable energy in addition to its ongoing work in the oil and gas sector. Mongolia has a substantial potential for both wind and solar power generation. A joint venture called SunSteppe Renewable Energy was established with an active and successful Mongolian renewable energy project developer.
A number of projects have been identified ranging in size from a few tens of megawatts to hundreds of megawatts and are being developed to construction ready status.
In addition, Petro Matad is looking at renewable energy possibilities to deply in its Heron oilfield development. The area around Heron is well suited to both wind and solar power generation.
Petro Matad is also studying the potential to use CO2 injection as an enhanced oil recovery mechanism for the Heron development. This technique has been widely used around the world for many years and has proven particularly successful in some of the larger oil field developments onshore in northern China. It has not been deployed in Mongolia where water injection has traditionally been used for reservoir pressure maintenance. Southern Mongolia is effectively covered by desert steppe and water is an increasingly precious resource. As such, an alternative to large scale water usage in oil production operations is considered a goal worth pursuing. Technical studies are now underway to determine the potential effectiveness of CO2 injection into the reservoirs of the Tamsag Basin.
See our Environmental, Social and Corporate Governance Initiatives page for a full list of social outreach and environmental activities.