Korea National Oil Corp. (KNOC) and GS Energy has begun producing crude oil in the Haliba oil field in the United Arab Emirates (UAE), seven years after signing a contract to explore the oil field.
The two Korean companies announced on July 2 that they will produce 40,000 barrels per day by the end of this year and 60,000 barrels by 2023. The Haliba field is the first UAE oil field that has been successfully developed by Korean companies.
The oil field is 60 percent owned by Abu Dhabi National Oil Co. (ADNOC) and the remaining 40 percent by the Korean consortium (30 percent by KNOC and 10 percent by GS Energy). In March 2012, the Korean consortium signed an agreement with ADNOC to explore the block. At the time of its discovery, the original oil in place (OOIP) was 180 million barrels, with 20 percent to 30 percent of the deposits available for extraction. Continued exploration has greatly expanded the petroleum in place to 1.1 billion barrels.
The Korean consortium has secured annual production of 5.84 million barrels (based on 40,000 barrels per day) in the Haliba oil field. The amount is worth US$390 million. The Korean consortium can freely dispose of the produced oil, including shipping it to Korea.
The production of crude oil is quite meaningful in that the Korean consortium has jointly conducted the whole process of exploration, development and production with ADNOC. It is also a good example of synergies created through strategic cooperation and technology exchanges between the KNOC and GS Energy. The Korean government has also invested a total of 103.3 billion won since 2015.
A commemorative ceremony for the commencement of oil production was held in the oil field with the attendance of Yang Soo-young, president of KNOC, Huh Yong-soo, president of GS Energy and Sultan Al Jaber, minister of state in the UAE and CEO of ADNOC.