Seoul Pushes Further on Foreign Energy Deals
SEOUL—South Korea announced a series of agreements and investments in Mongolian and Indonesian coal projects, following the Korean national oil company's $2 billion spending spree Monday on oil reserves in the U.S. and Kazakhstan.
Seoul is in the midst of a sustained drive with state and private companies to buy up foreign energy assets, to supplement meager domestic energy reserves and learn advanced extraction technologies. The latest moves come in the wake of a multibillion-dollar string of similar foreign acquisitions and investments over the past year.
South Korea is set to sign an initial agreement with Mongolia for cooperation in clean coal technology and resources development, the Ministry of Knowledge Economy said Tuesday.
By end-2011, the two countries also plan to set up a joint venture to upgrade low-grade coal to allow it to be used for heating and power generation, and to jointly invest about $300 million in a coal-gas power generation project, it said.
The venture—in which state-run Korea Gas Corp. and resources developer Korea Resources Corp., or Kores, along with steelmaker Posco and SK Innovation are considering participating—may involve acquiring stakes in Mongolian coal mines, the ministry said.
South Korean companies are also among short-listed participants in a bid for the right to develop Mongolia's huge Tavan Tolgoi coal reserves.
Kores also said Tuesday that a South Korean consortium has acquired a 90% stake in the 244 million-ton Kapuas coal mine in Indonesia for $84.15 million. Kores will invest $36.46 million in the mine, with initial output slated for 2013.
"With the continued rise in energy demand...and heightening concerns over oil supply amid the unrest in the Middle East [and North Africa], producing clean fuel is emerging as an effective way to replace oil," Knowledge Economy Minister, or commerce minister, Choi Joong-Kyung said in a statement Tuesday, referring to the Mongolia agreements.
Monday, the government said state-run Korea National Oil Corp., or KNOC, signed a contract with Anadarko Petroleum Corp. to buy a 23.67% stake in a shale oil producing block in Texas for $1.55 billion.
"Through cooperation in resource development with Anadarko, which has advanced technology in the area of shale oil, [South Korea] has secured a bridgehead for more business [opportunities] in unconventional oil development in North America," it said.
KNOC also said Monday it has acquired a 95% stake in Kazakhstan's Altius oil field for $515 million.
Commenting on those deals, the ministry said the oil output to be gained by the country amounts to 16,500 barrels a day, bringing the nation's self-sufficiency ratio for oil and gas up by approximately 0.5 percentage point. The ratio was last at 10.8%.
A week ago, South Korea also announced it had signed a pact with the United Arab Emirates to cooperate in oil and gas development and a preliminary contract for the development of three Abu Dhabi oil blocks, which could help to raise its oil self-sufficiency ratio to 15%.
Other investments by South Korean companies for foreign energy reserves in the past nine months include coal mines in Australia and Indonesia, gas assets in Canada and £1.88 billion ($3.07 billion) spent on the hostile takeover of U.K. oil explorer Dana Petroleum.
South Korea is one of the world's top energy importers, ranking fifth for oil and second for liquefied natural gas. In 2010 it spent $68 billion on crude-oil imports, $22 billion on imported LNG, $17 billion on refined oil product imports and nearly $13 billion on imports of coal, preliminary government data show.
Seoul is in the midst of a sustained drive with state and private companies to buy up foreign energy assets, to supplement meager domestic energy reserves and learn advanced extraction technologies. The latest moves come in the wake of a multibillion-dollar string of similar foreign acquisitions and investments over the past year.
South Korea is set to sign an initial agreement with Mongolia for cooperation in clean coal technology and resources development, the Ministry of Knowledge Economy said Tuesday.
By end-2011, the two countries also plan to set up a joint venture to upgrade low-grade coal to allow it to be used for heating and power generation, and to jointly invest about $300 million in a coal-gas power generation project, it said.
The venture—in which state-run Korea Gas Corp. and resources developer Korea Resources Corp., or Kores, along with steelmaker Posco and SK Innovation are considering participating—may involve acquiring stakes in Mongolian coal mines, the ministry said.
South Korean companies are also among short-listed participants in a bid for the right to develop Mongolia's huge Tavan Tolgoi coal reserves.
Kores also said Tuesday that a South Korean consortium has acquired a 90% stake in the 244 million-ton Kapuas coal mine in Indonesia for $84.15 million. Kores will invest $36.46 million in the mine, with initial output slated for 2013.
"With the continued rise in energy demand...and heightening concerns over oil supply amid the unrest in the Middle East [and North Africa], producing clean fuel is emerging as an effective way to replace oil," Knowledge Economy Minister, or commerce minister, Choi Joong-Kyung said in a statement Tuesday, referring to the Mongolia agreements.
Monday, the government said state-run Korea National Oil Corp., or KNOC, signed a contract with Anadarko Petroleum Corp. to buy a 23.67% stake in a shale oil producing block in Texas for $1.55 billion.
"Through cooperation in resource development with Anadarko, which has advanced technology in the area of shale oil, [South Korea] has secured a bridgehead for more business [opportunities] in unconventional oil development in North America," it said.
KNOC also said Monday it has acquired a 95% stake in Kazakhstan's Altius oil field for $515 million.
Commenting on those deals, the ministry said the oil output to be gained by the country amounts to 16,500 barrels a day, bringing the nation's self-sufficiency ratio for oil and gas up by approximately 0.5 percentage point. The ratio was last at 10.8%.
A week ago, South Korea also announced it had signed a pact with the United Arab Emirates to cooperate in oil and gas development and a preliminary contract for the development of three Abu Dhabi oil blocks, which could help to raise its oil self-sufficiency ratio to 15%.
Other investments by South Korean companies for foreign energy reserves in the past nine months include coal mines in Australia and Indonesia, gas assets in Canada and £1.88 billion ($3.07 billion) spent on the hostile takeover of U.K. oil explorer Dana Petroleum.
South Korea is one of the world's top energy importers, ranking fifth for oil and second for liquefied natural gas. In 2010 it spent $68 billion on crude-oil imports, $22 billion on imported LNG, $17 billion on refined oil product imports and nearly $13 billion on imports of coal, preliminary government data show.
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