Unlocking oil from Inner Mongolian sands

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Israel's Brack Capital Energy will begin exploration for oil sands reserves in the Xing'an region of Inner Mongolia this month, a senior company official said Tuesday.

The infrastructure and energy development company, which acquired some 261 square kilometers of exploration rights back in 2005, expects to generate an estimated 150,000 tons of tar-sands derived crude oil annually from the site.

According to Brack Capital, geological surveys show significant oil sands reserves are present and contain quality heavy oils.

Oil sands are classified as unconventional petroleum deposits and contain a naturally occurring and extremely viscous form of petroleum technically referred to as bitumen or tar oil.

According to Sam Muller, vice president of Brack Capital Infrastructure Development, a unit of Brack Capital Energy, the plant will leverage environmentally-friendly, in-house technologies to extract oil sands.

The Inner Mongolia Autonomous Region project is part of a joint venture between Brack Capital Energy and Austria's AME International and is expected to begin production before the end of this month.

Crude oil and bitumen - used in making asphalt roadways - will be the main products of the plant.

"The project will bring jobs and tax revenue to the local economy," said Muller.

You Jun, project manager at the plant, told the Global Times that the oil sands at Xing'an League could produce crude for the next 20 years.

Rui Dingkun, an oil industry analyst with China Jianyin Investment Securities, said that although the cost of oil sands extraction is greater than that of conventional oil, it is still profitable, as prices remain high. "That's why companies are now showing an interest in the sector," said Rui.

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