The state-run Korea National Oil Corp. is likely to shun new buyout deals for the time being as its CEO said the top priority of the firm next year would be making progress in current oil exploration and production projects.
“The company plans to focus its efforts on seeing progress in its ongoing oil E&P projects overseas next year,” KNOC CEO Suh Moon-kyu said.
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Suh Moon-kyu |
He made the remarks at a press meeting held on the opening day of the Abu Dhabi International Petroleum Exhibition and Conference on Monday.
KNOC chief also added the firm would seek asset rationalization continuously from next year by selling unprofitable assets on a rolling basis.
Suh, however, refused to name specific assets that may be subject to sale or restructuring, saying only that such activities were common to any oil company.
The state-run oil company has faced mounting pressure to lower its debt level like other state-run energy companies. KNOC’s debt nearly quadrupled in just four years from 5 trillion won ($4.7 billion) at the end of 2008 to 19.4 trillion won in 2012 mainly because of aggressive overseas buyout deals over the past five years.
The KNOC head claimed such efforts were already starting to pay off, mentioning recent discoveries in Kazakhstan and Iraq.
The firm recently discovered some 100 million barrels worth of oil reserves at its Zhambyl oil field in Kazakhstan and 600 million barrels at the Hawler Field in Iraq’s northern Kurdish region.
The KNOC chief hinted the next discovery was likely to come from its oil fields in Abu Dhabi, UAE.
“The company now plans to step up its exploration efforts in Abu Dhabi where the KNOC is jointly searching for oil with the Abu Dhabi National Oil Company in three separate areas,” Suh said.
A joint venture firm, set by the KNOC-led Korean consortium and ADNOC early this year, has led the exploration project for Area 1, 2, 3 in UAE. KNOIC holds a 30 percent stake in each area, while ADNOC holds a 60 percent stake and GS Energy, an affiliate of GS Group, holds the remaining 10 percent stake.
So far, the joint venture firm has discovered some 570 million barrels worth of oil in the three areas, KNOC officials said.
The companies plan to drill two evaluation holes at Area 1 in southern Abu Dhabi by next year to start early production in 2016 and commercial production in 2018, according to Kim Byung-jin, a project manager at the KNOC office in Abu Dhabi, adding that AREA 1 alone is believed to hold some 150 million barrels worth of oil.
By Seo Jee-yeon (
jyseo@heraldcorp.com)
