GS Caltex
Strikes Oil
in Thailand

Finds crude oil for second time following the find in Cambodia

GS Caltex struck large amounts of oil and gas reserves from an onshore mining block in Thailand.
The Korean oil refinery said it spotted two bearing zones in its first prospecting of L10/43 and L11/43 Mining Blocks. They are presumed to produce 1,254 bpd in crude oil and 0.72 MMcfd in as upon production rate testing under the first exploring phase. GS Caltex has a 30 percent stake in the mining blocks, located north of the Sirikit Oil Field, one of Thailand's largest ground fields.
The L10/43 and L11/43 Mining Blocks are known to have higher probabilities of hitting oil since they have strata similar to those of the oil-producing Pattani Basin in offshore Thailand.
GS Caltex said the size of the newly found reserves is so wide with 7,651 sq. km, four times as much as that of Jeju Island. Strata presumed to have promising crude oil reserves are believed to be scattered, so if drilling more wells would strike more oil and gas, officials at the Korean oil refinery predict.
They noted that the drilling wells could have been transformed into production facilities immediately, and crude oil transportation facilities have been already readied to cut down on initial investment costs in churning out crude oil and gas.
The newly found oil is rated to be API 41-45 or quality light crude oil, and a survey into the prospected oil indicates that the sample is economically viable because it is not almost mixed with such impure things as water.
GS Caltex signed an agreement to farm in a 30 percent participating interest of the blocks L10/43 and L11/43, subject to Thai government approval, from the operator Siam Moeco Ltd, which is a wholly owned subsidiary of Mitsui Oil Exploration Co., Ltd in early July 2006.
GS Caltex said it plans to continue prospecting in other mining zones. An evaluation of drilling into the mining zone will be conducted during the second prospecting period that starts in 2007. If it is confirmed to be economically viable, the production of crude oil from the ground mining zone may be possible in 2008,
the Korean oil refinery said.
Son Young-ki, executive vice president at Gas, Power & Upstream Business Development Division at GS Caltex, said his company has achieved a feat - striking oil in a Thai field for a second time following the discovery of oil reserves in Cambodia. GS Caltex plans to aggressively participate in overseas oil exploration and production (E&P) projects in a bid to promote corporate and national resources self-sufficiency, he added.
GS CALTEX'S ENTRY INTO EXPLORATION MARKET.
From a long-term plan to secure a stable supply of crude oil, GS Caltex acquired a 15 percent stake in the Offshore Mining Block A in Cambodia from Chevron in 2003. The Korean oil refinery drilled five wells during the first prospecting phase until March 2005, and all five wells were found to have quality oil crude and gas reserves. Prospecting the Cambodian mining block for the second prospecting phase is now under way, and more details, including the exact economic benefits, are to be determined during 2007, GS Caltex officials said.
In a related development, GS Holdings, the holding company of GS Caltex, has been getting more active in exploring crude oil since December 2005 when a consortium between GS Holdings and Korea National Oil Corp. (KNOC) won an international bidding to acquire a 5 percent-, a 30 percent- and a 20 percent-stake in NEM1, NEM2 and Wokam Mining Blocks in Indonesia, respectively.
GS Holdings, together with KNOC, prospects the Mining Block XVI in Yemen. Gs Holdings is holding final talks with the Yemeni government to acquire the 39th Mining Block.
GS Caltex has an ambitious plan to raise the ratio of securing crude oil through its own development to 10 to 15 percent of 722,500 barrels per day in refinery capacity. To this end, GS Caltex is striving to forge alliances with domestic and foreign energy corporations, while maximizing synergetic effects by beefing up collaboration with GS Holdings. The Korean oil refinery is making all-out efforts to secure core manpower in charge of crude oil exploration.
GS Caltex is seeking to enter crude oil exploration markets in strategic areas like Russia, Southeast Asia, the Middle East and Central Asia as part of its efforts to help Korea achieve its own goal of raising its own crude oil development ratio to up to 10 percent. nw

GS Caltex Chairman & CEO Hur Dong-soo

An onshore oil drilling facility in Thailand