President Yang Su-young of Korea National Oil Corp.(KNOC).

Korea National Oil Corp. (KNOC) plans to take a 30 percent stake in GS Energy’s 3 percent stake in Abu Dhabi National Oil Corp. (Adnoc). KNOC will take steps to take over the stake early next year after obtaining a government approval for the move which will give the state-owned oil corp the rights to 250 million barrels of crude oil from Adnoc’s oil fields in UAE for the next 40 years.

President Yang Su-young said in an interview with a local media outlet on Nov. 6 that GS Energy acquired the stake in 2015 and KNOC has the right to the 30 percent of the stake held by GS Energy, or 0.9 percent, of the 3 percent stake, effective until 2020.

It’s the first time KNOC has taken a stake in an overseas oil project in 8 years. The last was Dana Petroleum, a British oil exploration firm, in 2010.

KNOC is about to step up the restructuring of overseas oil fields, including hose owned by Dana Petroleum, and those belonging to Canada’s Harvest Oil. The state-owned oil company held a session to sell its stakes in those oil fields recently in Korea, along with the moves to select legal advisors.

President Yang said he hopes the sale of the stakes in Dana Petroleum will be completed in the first half of next year as the company plans to unload from 30 to 49 percent of the stakes in those oil fields, which are considered very profitable therefore not much trouble selling the stakes.
He said the company expected to have 600 billion won in operating profit this year, but the debts are still high at 700 percent due to the bad assets which should be settled rather quickly.

He also said the company will keep only the oil fields that are profitable, with the crude oil prices slated to recover, and continue to rise in the near future.

From 2010, the volume of crude oil still untapped begun to decrease while the demand for oil has been rising every year and the oil prices will rise on mid-to long-term prospective on account of supply and demand and based on international political situations.

KNOC has been strengthening the oil exploration side of its overseas operation especially in Kazakhstan, Vietnam, Abu Dhabi, Peru, and others. The company will soon start the oil exploration at the sandstone beds on the continental shelves off the Korean peninsula.

KNOC has also decided to support the government’s Recycled Energy 3020 Plan. The floating sea wind power plant over the Dong Hae Gas Pumping Facilities is the representative project for the plan.

Solar panels are installed at the unused oil storage facilities at the oil storage terminals around the country to take care of around 20 percent of the power needed at those oil storage facilities.
KNOC is not about to give its whole-hearted support to the government’s new recycled energy policies but limit it to the reuse of the existing platforms.

The new recycled energy is being used to replace oil but oil, the rice for the industry will continue to be in great demand as the primary energy source.

The government should continue to recognize the necessity of oil not only the power generation area, but also in other key areas such as the raw material for industrial products and as fuel for transportation. At the moment, about 55 percent of the oil consumption in the country go to the petrochemical industry, 32 percent as fuel for transportation and only 1 percent for power plants.

Korea National Oil Corporation, together with its subsidiaries, engages in the exploration, development, and production of crude oil in Korea, Canada, the United Kingdom, the United States, Kazakhstan, and internationally. It operates through Oil and Gas, Petroleum Distribution, Oil Stockpiling, and other segments.

The company sells oil and gas, as well as engages in oil trading activities; and distributes wholesale gasoline, gas oil, and kerosene.

A view of the Donghae Gas Platform operated by KNOC off the coast of South Korea. (Photos: KNOC)