- Deal will be finalised this week according to reports
- GS Energy would be third company to enter Abu Dhabi Company for Onshore Petroleum Operations
- Abu Dhabi strengthening ties with Asian customers
South Koreas GS Energy is set to become the third company to win a stake in Abu Dhabis onshore oil concession, according to a report by Bloomberg news agency.
The company is expected to sign a contract to join Abu Dhabi Company for Onshore Petroleum Operations (Adco) later this week, claims the report, citing industry sources.
State-owned Abu Dhabi National Oil Company (Adnoc) has to date awarded a 10 per cent stake in Adco to French oil major Total and a 5 per cent interest to Japanese energy group Inpex.
GS Energy, the energy arm of GS Holdings Corporation, was not thought to be one of the original companies submitting a bid to enter the 40-year concession to operate Abu Dhabis onshore oil fields.
GS Energy bid for a 5 per cent stake in the joint venture, and the award would likely cost the South Korean firm a signing fee of $1.1bn, equal to Inpexs payment.
Adco is aiming to increase its production capacity to 1.8 million barrels a day (b/d), from a current level of about 1.6 million b/d. This represents more than half the crude output capacity of the UAE.
Awarding a stake to a South Korean company could be in line with Abu Dhabis strategy to strengthen ties with the countries buying its crude.
The majority ofthe emirates crude exports head east to Japan, South Korea, China and India and its 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.
State-run Korea National Oil Corporation (KNOC) leads the consortium with a 34 per cent stake, GS Energy holds 6 per cent and Adnoc retains a 60 per cent interest.