International Oil
A South Korean consortium comprised of the Korea National Oil Corporation (KNOC) and GS Energy secured a stake in the largest oil field in the United Arab Emirates (UAE).
The Korean consortium announced that it signed a contract with Abu Dhabi Company for Onshore Oil Operations (ADCO) to have operating rights to its oil fields on May 13. The state-run Abu Dhabi National Oil Company (ADNOC) holds 60 percent of the stake in ADCO’s oil fields, while international oil companies hold the other 40 percent. Also, the oil fields will be jointly operated for 40 years.
The contract was signed by GS Energy on behalf of the Korean consortium. ADCO chose GS Energy with 3 percent, Total with 10 percent, and Inpex with 5 percent as its joint operators. The company is still selecting additional operators for the remaining 22 percent share.
For this bidding, the Abu Dhabi government only invited 11 chosen international oil companies, including the world’s major oil corporations including British Petroleum, and the Korean consortium won the contract through competition with those companies.
The oil fields in Abu Dhabi currently have about 27.1 billion barrels of oil reserves remaining, and produce 1.6 million barrels per day. Its oil fields rank 6th in the world in terms of remaining oil reserves. In particular, they account for about 50 percent of crude oil output in Abu Dhabi. Therefore, the contract is expected to become the largest deal in Korea’s oil development history.
Meanwhile, the KNOC will have the right to demand the purchase of 30 percent shares of GS Energy’s participation share of 3 percent for five years, so that it can participate after its financial structure has improved in the future.