Petro Matad's reassignment of Shell's Mongolian oil blocks approved

The reassignment of blocks four and five were approved, which means that through its wholly-owned affiliate, Central Asian Petroleum Corporation, Petro Matad now owns 100% of the two blocks.

Shell will pay $5m to Petro Matad within 10 working days, following on from the $10m paid by the oil giant previously.

The reassignment needed sign-offs at many levels before the Mongolian cabinet could ultimately approve the request, which was delayed due to elections in June and the subsequent reorganisation of government departments.

The company said that it is preparing to drill two wells next year and the drilling tender will be released in January, with the first well expected to spud in mid-2017.

Shares in Petro Matad rose 2.11% to 8.22p at 1150 GMT and shares in Royal Dutch Shell nudged up 0.05% to 2,137p at 1212 GMT.