Korea National Oil Corp. (KNOC) has secured new exploration rights for the Block 15-1, Vietnam’s second largest oil field.
KNOC and its partners, including SK Earthon, struck a deal on the extension of the production sharing contract (PSC) for the block with Vietnam’s state-run oil company, Petrovietnam (PVN), on June 20.
KNOC participated in the Block 15-1 project in 1998 and succeeded in the exploration of the field in 2000.
With the Black Lion oil field, which began production of crude oil in 2003, the field produced 430 million barrels in cumulative figures until 2024, and it is now producing about 34,000 b/d.
KNOC had earned a combined $1.4 billion in revenues over some 20 years through its investment in the Block 15-1.
The new production sharing contract for the Block 15-1 was signed ahead of the expiry of the existing PSC in September. The new deal calls for extending the PSC for 25 years until September 2050.
Under the agreement, KNOC has acquired an 11.4 percent stake and 25-year additional resources exploration rights.
Under the agreement, KNOC is expected to earn additional revenues from increased reserves. KNOC’s cumulated data and technology are expected to be used from the operation of the block.
The extension of the exploration rights on the block takes on great significance from the point of resource security and regional strategies.
Amid rising uncertainties and geopolitical risks in the Middle East, Korea has secured the effectiveness of its resources diplomacy by teaming up with Vietnam, Aisa’s key partner country, to stabilize the supply of energy resources.
Vietnam is a strategically important energy and transportation hub adjacent to the South China Sea, serving as a strategic bridgehead for Korea’s energy security.
The deal is expected to further solidify trust between Korean and Vietnamese governments, thus establishing an energy cooperation center in the Southeast Asian region and expanding Koea’s energy diplomacy horizon.
KNOC and partners plan to invest $1.3 billion into the White Line oil field in the Block 15-1.
When gas field exploration is completed, it is expected to supply 125 million cubic feet (ft³) of natural gas per day to the Vietnamese domestic market, thus greatly contributing to the stable supply of energy to the Southeast Asin country.
KNOC President Kim Dong-sub said, “The signing of the new exploration rights of the Block 15-1 is owed to both countries’ strengthening of strategical cooperative relations into broader economy, diplomacy and industries beyond energy security, and KNOC has established a milestone of ramping Korea’s resources diplomacy through the contract and expand its presence in the Southeast Asian market in the future.”
Korea and Japan Join Hands to Ramp Up Energy Security
Korea National Oil Corp. held an annual meeting with Japan Organization for Metals and Energy Security (JOGMEC) at KNOC’s headquarters in Ulsan on July 8 and discussed petroleum stockpile polices of both countries and pending issues of petroleum stockpile technologies.
JOGMEC is Japan’s state-run energy company responsible for playing a pivotal role in national energy security by supporting the finance and technology of petroleum, mineral resources and new energy development projects.
The meeting was attended by Ahn Beom-hee, head of the Stockpile Business Division at KNOC and his JOGMEC counterpart Tetsuya Furuhata.
Both companies have held annual meetings to share stockpile policy trends in both countries and stockpiling experiences since Korea and Japan struck the Strategic Alliance Agreement in June 2007.
Meanwhile, Korea owns a combined 206.9 days’ worth of strategic petroleum reserves through the public and private sectors, while Japan maintains 199.3 days of reserves.
During the meeting, both sides discussed the current status of both countries’ government petroleum stockpile policies and topics related to stockpile centers, such as stockpile center facility management, stockpile crude oil quality management and stockpile center disaster management.
In particular, this year, they took up how to clean up the inside in the opening and inspecting of crude oil tanks.
A JOGMEC delegation is to tour the Pyeongtaek Strategic Reserve Base, operated by KNOC.
During the visit, both companies are expected to discuss technological experiences on the under storage of LPG.
KNOC plans to regularize meetings with JOGMEC in the years to come and ramp up a cooperation regime for energy security of both countries by sharing experience in each business area.
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