GS Energy secured a stake in an onshore oil field in the United Arab Emirates (UAE) from the Abu Dhabi National Oil Co., which is in charge of the operation of 15 onshore blocks in the Arab country.
Chairman Huh Chang-soo of GS Group has been calling for the group to expand its operations overseas to further develop the Korean economy and create jobs.
He said business firms should generally stick with the paradigm they used to create new businesses at home, which can also be employed overseas to explore new businesses in the global market with a more daring entrepreneurial spirit.
He said with creative minds, they should preserve existing resources and harmonize them well so they can produce the goods and services that are marketable overseas.
In order to broaden its overseas businesses and explore new ones, the group should strengthen the competitiveness of its major business areas such as energy, distribution and construction, and explore new segregated businesses overseas for the sake of the group’s future growth.
GS Energy said on May 13 that it signed an agreement with Abu Dhabi National Oil Co. to acquire a 3 percent stake in Abu Dhabi’s largest onshore oilfield concession for 40 years, in a consortium with Total of France (10 percent) and Inpex of Japan (5 percent).
The ADNOC owns 60 percent of the land mining district, while other companies share 40 percent stakes in the onshore oil bloc in Abu Dhabi, the United Arab Emirates (UAE).
This particular oil-field concession with Total and Inpex is a $22 billion venture.
The energy unit of South Korea’s GS Holdings Corp. will gain access to about 50,000 barrels of oil per day for its share in the 40-year concession, the company said Jan. 13 in an e-mailed statement. GS Energy will pay state-owned Abu Dhabi National Oil Co. a signing bonus of $670 million, it said in a regulatory filing in Seoul. Korea National Oil Corp. said it’s joining GS Energy in the venture.
Korea National Oil will provide technical support to GS Energy and has the right to buy as much as 30 percent of GS Energy’s stake in the concession over the next five years, Joo Hyoung-in, a KNOC spokesman based in Ulsan said by phone.
Inpex won a 5 percent stake in the Abu Dhabi venture last month. Total secured a 10 percent interest in January.
The awards to Inpex and GS Energy represent a shift away from Abu Dhabi’s traditional partners. The emirate, the largest in the United Arab Emirates, has pumped oil from its onshore fields under concession deals with BP, Exxon Mobil, Royal Dutch Shell, Total and Portugal’s Partex Oil & Gas or their predecessors since January 1939. Adnoc joined them in the 1970s, forming the partnership that extracted Murban crude, the U.A.E.’s main blend, until the concession agreement expired last year.
Abu Dhabi is seeking new partners to replace some of the Western companies that pumped oil in the emirate for 75 years, until their last production agreement expired in January 2014. By selecting GS Energy and Inpex, Abu Dhabi is for the first time awarding stakes in its biggest onshore producing fields to companies from Asia, where the emirate sells most of its crude.
GS Energy, with Korean National Oil, is already a partner with Adnoc in exploration blocks in Abu Dhabi, and the group plans to produce its first oil there in 2017. Korea Electric Power Corp. is building four nuclear reactors for Abu Dhabi, with the first one scheduled to start operating in 2017. Korean companies also have been awarded contracts to build refineries and other energy facilities in the emirate.
GS Energy is a subsidiary of GS Holdings, the energy, retail and construction conglomerate controlled by Huh Chang-soo, chairman and chief executive of the group.
The company owns substantial refining interests via GS Caltex, a joint venture with Chevron, that was spun off as an independent company and which has bought crude oil from Abu Dhabi for more than three decades.
_GS에너지 계약.jpg)
