- GS Energy becomes third international oil company to join Abu Dhabi Company for Onshore Petroleum Operations (Adco)
- Korea GS E&P reportedly paid $676m to join Adco
- Firm plans to receive technical support from Korea National Oil Corporation
South Koreas GS Energy has been awarded a 3 per cent stake in the 40-year concession operating Abu Dhabis onshore oil fields.
The companys subsidiary, Korea GS E&P Pte Ltd, entered the joint venture effectively from 1 January, and becomes the third international oil company (IOC) to join Abu Dhabi Company for Onshore Petroleum Operations (Adco), according to the official Emirates News Agency (Wam).
Korea GS E&P, which reportedly paid a fee of $676m to join Adco, plans to receive technical support from Korea National Oil Corporation (KNOC).
The new addition joins Frances Total and Japans Inpex, which have already been awarded respective 10 per cent and 5 per cent stakes in the joint venture.
Abu Dhabi National Oil Company (Adnoc) is set to retain a 60 per cent interest in the joint venture, with the remainder available to IOCs taking part in the bidding round.
Abdullah Nasser al-Suwaidi, director-general at Adnoc, told reporters in Abu Dhabi in mid-April that there was no deadline on further deals in the joint venture.
Adco is aiming to increase its production capacity to 1.8 million barrels a day (b/d) by 2017, up from a current level of about 1.6 million b/d. This represents more than half the crude output capacity of the UAE.
South Koreas entrance to the key oil asset ties in with Abu Dhabis strategy to strengthen its relationship with the emirates main Asian crude customers.
The majority of the emirates crude exports head east to Japan, South Korea, China and India and Abu Dhabis leadership has gradually given its customer countries larger roles in its upstream oil sector.
In early 2012, GS Energy was given a stake in a 30 per cent joint venture to develop three oil blocks in Abu Dhabi.
KNOC leads the consortium with a 34 per cent stake and GS Energy holds 6 per cent, while Adnoc retains a 60 per cent interest.