KOGAS signed a contract to invest in the development of oil fields in Iraq
The state-run Korea Gas Corporation (KOGAS), Korea's sole LNG provider, signed a contract on January 28 to invest $1.05 billion in the development of the Badra oil field in Iraq over the next 20 years. KOGAS participated in the international bid conducted by the Iraqi central government in December 2009 in the form of a consortium with Gazprom Neft of Russia. KOGAS was the only Korean company to participate in the bid. The consortium including KOTAS obtained the exploration and development rights for the Badra oil field, signing a provisional contract on December 24, 2009 and the main contract on January 28, 2010. KOGAS anticipates securing approximately 20 million barrels of oil over the 20 years for its investment, producing about 800 million barrels of oil.
The Badra oil fieldis located 160 km southeast of Baghdad, the Iraqi capital, and extends across the border with Iran. The oil will be transported through pipes in the future. Under the contract, KOGAS will hold a 22.5% stake, while Russia's Gazprom Neft, the operator of the project, 30%, TPAO, Turkish Petroleum Corp, 7.5% and Petronas Carigali 15%, and Iraq's Oil Exploration Company a 25% stake. The total investment amount by the consortium during the 20-year contract period is expected to be approximately $3.52 billion.
KOGAS plans to strategically expand its E&P capacity in Iraq by participating in the oilfield development project in Badra as well as the Zubair oil field in Iraq. On January 22, a consortium comprising of KOGAS, Eni S.p.A of Italy and Occidental Petroleum Corporation of the U.S. signed a final deal in Baghdad to develop the Zubair oil field in southern Iraq. KOGAS plans to invest approximately $6.5 billion in the Zubair oil field. KOGAS expects to cooperate with the Iraqi government or the Iraqi State-run Company to strategically work together to utilize this opportunity in order to maximize results.