Press Release: Mongolian Government Unlikely to Receive Dividends from Oyu Tolgoi until 2035

Press Release For Immediate Use

Berlin, 26 October 2016 – Oyu Tolgoi is the biggest foreign investment in the history of Mongolia, but the country probably won’t get any dividends from its direct stake in this massive mining project for at least another twenty years — if any at all. That’s according to a first-of-its-kind research project from the Berlin-based consultancy OpenOil, which has developed a methodology to lift the curtain on mining and energy, on a project-by-project basis.

The model and accompanying narrative report show that the government may not see dividends from its 34% share of the project until well into the next decade, if at all – despite the fact that Mongolia spent more than two years re-negotiating the original deal with Rio Tinto.

The base scenario of the model estimates the government should have received up to $1.1 billion since the mine started up in 2010, and, depending on future market conditions, could earn many hundreds of millions of dollars a year by the 2020s. But that would be as a result principally of royalties, VAT, income tax and other revenue streams put in place when the project was signed in 2009. Meanwhile, a 34% direct stake in the commercial operation, the subject of a tough and prolonged negotiation between the government and Rio, is unlikely to earn any extra revenues until well into the 2030s.

The financial model is part of a series of open source financial models and accompanying analyses for a number of mining and oil and gas projects that OpenOIl is developing – as part of an initiative to develop a Public Financial Management paradigm to upstream modeling of extractive industries.

The Oyu Tolgoi model is based entirely on public sources, including a 2014 Technical Report published by Turquoise Hill Resources. The Technical Report shows positive project economics from the expansion of the project into underground mining from 2015 onwards.

OpenOil’s analysis goes beyond this and evaluates the project across its entire lifecycle – from when exploration started and into the future.

The main findings of OpenOil’s model and analysis are:

  • The complex financing arrangements agreed between investors and the government have a major impact on the sharing of benefits across the project’s life. For example, because dividends are paid only after repaying debt the government’s 34% equity is unlikely to generate revenues for many years, and may not be worth much, unless commodity prices increase substantially.
  • Viewed across the entire lifecycle of the project, starting from the development of the open pit operation in 2010, the project is much less lucrative that many commentators appear to believe.
  • If the 20% withholding taxes on dividends and interest that applied in Mongolia when the Investment Agreement was signed were imposed on Oyu Tolgoi, these would add some $6.9Bn to the government’s total fiscal revenues over the life of the project.
  • However, under the stabilized terms of the Investment Agreement Turquoise Hill appears able to take advantage of Mongolia’s double tax agreement with the Netherlands and eliminate these withholding taxes, even though Mongolia cancelled the treaty in 2014.


Olumide Abimbola, Head of R&D,

Iliusi Vega, Project Manager,

[PDF] Press Release – Mongolian Government Unlikely to Receive Dividends from Oyu Tolgoi until 2035


Category: Blogs, OpenOil blogs · Tags:

More and more oil & mining companies are factoring Brexit into forecasts

In anticipation of and in the weeks after the vote by the UK to leave the European Union, Brexit has increasingly been factored into the economic forecasts of the extractives industry, our research of financial reports filed to regulators globally shows.

We can examine this reporting trend across the oil, gas, and mining sectors. The trend began before the vote in May, with filings made by companies like Still Limited to the Bombay Stock Exchange, warning of the effects of Brexit on their future activities. Once the referendum was passed in June, more and more companies — such as Petrobras Global Finance BV and BHP Billiton Ltd — reported on Brexit’s potential impact on their business, in particular in the 2nd Quarter submissions to financial regulators.

“Global growth over the remainder of the 2016 calendar year is expected to remain modest”, as stated in BHP’s latest half year report, “and subject to downside risks, including the uncertain economic consequences of ‘Brexit'”. Other companies mention the effect of the referendum on gold prices to their investors.

Through Aleph you can quickly find out which companies are choosing to include Brexit in their reports to investors – mainly included in either the risk, or business climate sections.

Aleph updates daily and tracks filings from financial regulators and stock exchange news sites on all continents including the Canadian SEDAR, US SEC, Australian Stock Exchange, and London Stock Exchange.

Navigate through this graph to see details on the companies reporting on Brexit. Note that the G20 summit has just passed and we expect, in the next reporting cycle, an increase in mentions of the Brexit referendum.

Dataset available here [google sheet]

Category: Blogs, OpenOil blogs, Uncategorized · Tags:

Using Aleph to build cash flow models – the example of Vaca Muerta, Argentina

The Vaca Muerta formation – background and context

Argentina holds the second largest shale gas reserves in the world. The Vaca Muerta formation, in the Neuquén Basin, is one of its main producing areas and its largest play of dry, wet, and associated shale gas resources.

Figure 1. The Vaca Muerta formation.

Figure 1. The Vaca Muerta formation. Taken from the SEC.

In July 2013, the Argentine energy company Yacimientos Petrolíferos Fiscales and Chevron announced a partnership for drilling in one of the five development blocks in Vaca Muerta, which included the Loma La Lata Norte and Loma Campana fields. At that time, the Loma Campana field was already producing more than 10,000 barrels of oil-equivalent per day. In 2014, the project was extended for 35 years. With an unusually high reliance on oil and natural gas, and the weight of years of economic mismanagement, this agreement doubtlessly plays a major role in the Argentinian economy.

At the same time, the project has raised several inquiries about its environmental viability, the lax extension of the concession, its violation of Mapuche territory and tax exemptions that reduce the percentage of revenues for the government. Adding to this, a ruling from 2014 has made impossible to request information about the secret clauses of this agreement, which could help clarify who is profiting out of this project.

Yet, there has been a series of orders for disclosure from various Argentinian courts to YPF, especially after November 2015, when the Argentinian’s highest court (finally) found that operations in this field were of public interest. To all orders, YPF has appealed, claiming this would affect ‘its interests and those of its shareholders’.

How public domain information can help out

But we know there is enough information in the public space to help clarify many of these issues, like who profits from this project and to which extent. Following this philosophy, we have recently established a collaboration for developing a model of the cashflows of YPF in the Loma Campana field with partners in Argentina – Observatorio Petrolero Sur (OpSur) and Andres Knobel, Consultant at Tax Justice Network – within the scope of our Financial Modeling Program.

When modeling the cashflows of a project, however, we require data on production, costs, reserves and prices. OpSur had already gathered partnership agreements and YPF Quarterly reports, from which we have figures for production, reserves and operating costs. But we still needed to update the data on reserves and find figures for exploration, development and transportation costs.

Finding information with Aleph

This is where the OpenOil search engine, Aleph, comes into play. We use it to search through corporate filings of publicly listed extractive companies so that we can find the missing data.

Figure 2. Aleph, a tool developed by OpenOil for searching through corporate filings of publicly listed extractive companies across multiple jurisdictions.

Figure 2. Aleph, a tool developed by OpenOil for searching through corporate filings of publicly listed extractive companies across multiple jurisdictions.

Let’s start by searching for “loma campana gas reserves” in Aleph. This throws a list of 17 documents spanning years 2012 to 2016.

Clicking on the most recent document, a 20-F form, shows a preview of it. And the pages containing relevant information are highlighted and sorted by either filing data or relevance to our query.

In the top right search bar of this page, we can make internal searches in the document. So we look for “gas”:

Voilà! Here are the figures for all types (PDP, PDNP, PUD and TR) gas reserves for the project, as of December 2015.

Next, we want to find data on the different categories of cost. This, however, proved more challenging and led to some unexpected interesting findings.

Figures on costs are often listed in financial reports. But a first search of “loma campana
financial report
” leads to only two documents of 2013 and 2014. We want to find better information, so we make another general search for “loma campana capital expenditure”, a term that is more specific to what we want to look up. This search throws up 7 documents, from 2013 to 2016.

This time we go to the second document listed, a 6-K Form, given that the first contains text in a format difficult to read. In this, there is only one mention of our search term, but we are lucky: it contains information on development costs.

Even more interesting is that it also mentions the participation of another company, Compañía de Hidrocarburo No Convencional S.R.L. (“CHNC”), in 50% of the exploitation of Loma Campana. And it also mentions gas and oil purchases of YPF to CHNC in years 2013, 2014 and 2015, and net balances for the same period. A general search in Aleph for “loma campana chnc” lists 13 documents we could review in the future.

For now, we continue with an internal search of term “loma campana” within this document. We find three pages mentioning it. Going to the first mentioning, we find more unexpected but relevant information on royalties and development costs.

With this data – although still patchy and incomplete – we are much closer to being able to model the cashflows of the project, but that’s for another post. In the meantime, however, we would like to continue being informed on more data coming into Aleph. So we simply go to the top right of the page and add a weekly alert. This way, we will receive emails every time a document with new mentions of our search term is added to Aleph, and with reminders of our search.

Search for figures on reserves using Aleph.

Figure 3. Search for figures on reserves using Aleph.

Hopefully by now you are now convinced of using Aleph for finding relevant information on the extractive industries. Our experts in Open Oil will be glad to give you advice on how to incorporate Aleph to your work.

Category: Blogs, Uncategorized · Tags:

Press Release: OpenOil Launches Aleph, a Search Engine for Extractive Industries Corporate Filings

Press Release For Immediate Use

Berlin, 4 August 2016 OpenOil, a Berlin-based consultancy, has launched Aleph, a new tool that enables government officials, journalists, financial analysts and researchers to search through corporate filings of publicly listed extractive companies across multiple jurisdictions.

At launch, users can utilise Aleph to search through more than two million documents, a database that grows in real time as coverage keeps expanding. Documents filed to main mining reporting jurisdictions such as Canada, United States, Australia and South Africa, among others, are indexed and made searchable, with direct links to the originals.

Speaking about the motivation behind Aleph, Johnny West, OpenOil’s Director, said, “Companies operate globally but report locally. It is very hard to have a view of what they are doing around the world – except, of course, if you are their shareholder or regulator.”

“With Aleph, anybody can read and analyse what these companies are telling their shareholders and regulators,” he added.

Users can search for specific companies and peruse specific documents. They can also create alerts for search items built around companies, persons and/or countries. Whenever new documents that fit the search criteria are filed, users will be notified directly by email, with links to the documents.

Aleph also indexes OpenOil’s repository of extractive contracts, making them all searchable from the same interface — and making Aleph a timesaver for anyone tracking major extractive companies.

Aleph is developed with financial support from the Shuttleworth Foundation and ODINE. It advances OpenOil’s commitment to transparency in the extractive sector, along with other offerings such as public interest financial modelling, corporate mapping, and concession mapping.

Aleph can be accessed at

Promo Video:



Olumide Abimbola, Head of OpenOil R&D,

Lucile Neden, Aleph Project Manager,


About OpenOil:

OpenOil UG is a Berlin-based consultancy, publishing house and training provider. Founded in 2011, the company resides at the intersection of open data and governance of natural resources, specialising in the use of public domain data for extractive sector transparency.

[PDF] Press Release – Aleph Launch

Category: Blogs, Uncategorized · Tags:

BP publishes Payments to Governments Report

With the coming into effect of the European directive on mandatory disclosures in the extractive sector in the UK and France, this year will see the publication of entirely new data by major players in the mining, oil and gas industries. Companies have to publish their payments to governments, the nature of the payments and their recipients if these exceed $100.000. Companies also need to disclose payment data relating to each project.

London Stock Exchange-listed oil giant BP p.l.c. has published its Payments to Government Report for 2015. According to the report, the company has paid a total of $ 15.19 billion to governments in its countries of operation. Here is an overview of the report. It shows how much BP has payed to and received from governments, which types of payments it made and how the payments compare to each other. It is a quick visualisation rather than an analysis. However, any questions related to the payments are starting points for relevant data analysis.

The report has been published as pdf on its official website. You can also find them as csv files on the Companies Hous (the UKs registrar of companies) extractives service website.