UAE signs agreement for joint Korean crude stockpile

25 November 2012

Adnoc to provide 6 million barrels to increase Asian country’s energy security

State oil companies in the UAE and South Korea have signed a deal to develop a strategic joint crude oil stockpile designed to consolidate the Asian country’s energy security.

Abu Dhabi National Oil Company (Adnoc) signed an agreement with Korea National Oil Corporation (KNOC) to provide 6 million barrels of crude oil for the Korean Strategic International Joint Stockpile Program, according to state-owned Emirates News Agency (Wam).

The agreement provides the South Korean government a right to purchase Abu Dhabi crude in the Strategic Petroleum Reserve in the event of an oil shortage.

A strategic agreement between the two countries was initially mooted in September 2011 as a response to Korean oil reserves being depleted by the effects of the Libyan civil war.

The signing strengthens the relationship between Adnoc and KNOC, which developed when the Korean company was awarded a stake in three Abu Dhabi oil blocks in March 2012. Under the 30-year deal, the companies are expected to produce 35,000 barrels a day (b/d) as early as 2013.

Asia accounts for nearly all of Abu Dhabi’s oil exports, with major buyers including China, Japan, South Korea and India.

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