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Overseas Energy Development Projects Achieving Positive Results
Energy Development
Overseas Energy Development Projects Achieving Positive Results
  • By matthew
  • August 20, 2014, 05:54
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The Korea Gas Corporation has obtained over 10 million barrels of crude oil from the Zubayr Oil Field in Iraq as of August 3.
The Korea Gas Corporation has obtained over 10 million barrels of crude oil from the Zubayr Oil Field in Iraq as of August 3.

 

Korean public energy companies and their private-sector counterparts in the power generation industry are producing visible results from their energy development projects abroad in the form of cash, petroleum, mineral resources, and much more. Under the circumstances, experts point out that the government needs to pace itself in trimming down public enterprises’ overseas projects for debt restructuring.

Korea Midland Power is currently recovering its investment in the Cirebon Coal-fired Power Plant and earning profits from the operation and maintenance of the Java Power Plant in Indonesia. The former, which was put into commercial operation in July 2012 and will be run by the company for three decades, is expected to yield US$20 million late next month, and the amount is estimated to be US$14 million and US$15 million for 2015 and 2016, respectively. The Java Power Plant, which has been operated by Korea Midland Power since 2012, is predicted to generate 1.5 to 2.0 billion won (US$1.4 to 1.9 million) each year for the next 20 years. The special incentive reached 1.8 billion won (US$1.7 million) last year.

On August 3, the amount of crude oil that the Korea Gas Corporation obtained in the Zubayr Oil Field in Iraq exceeded 10 million barrels, which is equivalent to at least US$1 billion. The corporation has a 23.75 percent share of the project for producing 6.5 billion barrels of crude oil for 25 years and has acquired crude oil since 2011. The amount will further increase when that produced in the Badra Oil Field is added in December. The daily production volume is currently 15,000 barrels in Badra, but it is scheduled to be expanded to 170,000 barrels. The combined daily throughput of Zubayr and Badra is forecast to reach one million barrels in 2018 to boost crude oil delivery to the Korea Gas Corporation as well.

The Korea Resources Corporation has participated in a nickel development project in Ambatovy, Madagascar, with a share ratio of 22.5 percent, and obtained rights to sell half of the production. It has imported 6,000 tons of nickel to Korea since the beginning of the commercial production last year, and is planning to increase the volume to approximately 30,000 tons through production expansion early next year.

“Despite such success, we are decreasing our shares in overseas projects in order to comply with the government’s policy,” said an executive at one of the companies, adding, “However, we will keep searching for profitable business opportunities abroad, because withdrawal means that Korea’s position will be at stake in the international resources market.”