State-owned Abu Dhabi National Oil Company (Adnoc) has signed a 30-year deal with two South Korean energy firms to develop three oil fields in the UAE.
The state-run Korea National Oil Corporation (KNOC) leads a consortium with South Korea’s GS Energy to explore and develop three oil blocks, two onshore and one offshore, according to a 5 March statement from the South Korea’s Knowledge Economy Ministry.
KNOC will take a 34 per cent stake in the development and GS Energy will own 6 per cent, with the remainder being held by Adnoc. The blocks cover a total area of 11,560 square kilometres and KNOC’s initial estimate puts the block’s reserves at 570 million barrels of crude oil. Development work will commence immediately.
Abu Dhabi and Seoul signed a memorandum of understanding in March 2011 for the deal. Production could begin as early as 2013 at 35,000 barrels a day (b/d), with 17,000 b/d bound for export to South Korea. Under the initial agreement, South Korea secured the status as preferred buyer of 300,000 b/d of crude, while Abu Dhabi will be able to store 6 million barrels of crude in the South Asian state at no cost, on the condition that South Korea can access the oil in times of crisis.
In 2011, South Korea imported 926 million barrels of crude oil, its largest ever volume, at an average of 2.5 million b/d. Approximately 87.3 per cent of its imports came from the Middle East, up by 5.5 per cent on the previous year. However, imports from Iran decreased by nearly 17 per cent in December, on the back of increased international pressure.