Korea Gas Corp. (KOGAS) announced on Dec. 18 that it received 93.3 billion won in dividends from KOGAS Iraq B.V, a KOGAS subsidiary established to carry out Iraq's Zubair Crude Oil Project, on Dec. 17.
The Zubair project achieved daily oil production of 500,000 barrels, the goal for the first phase of production, in September. The project has become highly likely to reach 700,000-barrel production a day, the second-phase target. Hence, it is expected to have a positive impact on the growth of KOGAS’ profit over the long term.
KOGAS has participated in the Zubair project since 2010 and produced 180,000 barrels of crude oil a day in the first year and is expected to produce an average of 540,000 barrels of oil a day in 2020.
KOGAS Iraq B.V. invested a total of US$3.05 billion in the Zubair project as of November this year. Yet it has thus far recouped US$3.19 billion (cumulative crude oil recovery of approximately 54.48 million barrels), posting a 104 percent return on investment. The company recorded US$418.1 million in net profit in the third quarter of 2019.
KOGAS invested US$378 million in the Iraq subsidiary and the latest dividend receipt boosted its return on investment to US$409 million (108 percent as of the end of 2019). It is expected to receive dividends and earn net profits stably for the remainder of the project by 2035.