KNOC Leads Consortiums to
Tap Two More Blocks in Yemen

Strengthening presence in overseas petroleum exploration in the Middle East

Korean consortiums headed by the Korea National Oil Corporation (KNOC President Hwang Doo-yul) have secured two more petroleum mining blocks in Yemen.
The Ministry of Commerce, Industry and Energy (MOCIE) said Korean consortiums led by KNOC signed production sharing agreements on the Yemeni Block Nos. 39 and 4 with a combined 750 million barrels of presumed reserves on May 30 in Yemen.
The signing of the deals came at the end of two years of negotiations after Korea was awarded a tender to prospect the Mining Block No. 39 and No. 4 in July and September 2005, respectively.
Block No. 39 is a promising ground block near the border with Oman. It is presumed to contain 500 million barrels of possible resources. The Block No. 4, a ground mining block in central Yemen, is confirmed to have 36 million barrels of reserves and presumed to contain 216 million barrels of possible reserves. In particular,
the Block No. 4 is forecast to produce 5,000 bpd of crude oil from 2008 when full-fledged production begins because the block has 36 million barrels of proven reserves, said Lee Seung-woo, director of Petroleum Development Division at the MOCIE.
A Korean consortium has a 95 percent interest in the Block No. 39 and Yemen Oil and Gas Corp. owns the remaining 5 percent stake. The consortium is comprised of KNOC (50 percent stake), Samchully (20 percent), Daesung (15 percent) and GS (15 percent). Another consortium has a 50 percent stake in the Block No. 4, while the remaining half is owned by Yemen Investment Company (YICOM). The consortium is composed of KNOC (60 percent); Hyundai Heavy Industries (30 percent); and Hanwha (10 percent).
The latest deals have brought to five the number of petroleum explorations projects Korea has been undertaking in Yemen. The existing three projects are the Ma'rib gas field, Ground Block No. 70 and Maritime Block No. 16 projects.
Korea's acquiring two more petroleum blocks is expected to help it secure a bridgehead in oil producing countries in the Middle East, including Saudi Arabia, Iran, Kuwait, Qatar and UAE, where Korea finds itself difficult to crack the petroleum exploration market.
KNOC operates a representative office with a staff of 10 to supervise the Yemeni projects. The Korean public corporation is expected to accumulate a diverse range of development and prospecting experiences as a company which owns the rights to operate the new Blocks Nos. 39 and 4 as well as the existing Blocks Nos. 70 and 16, MOCIE officials said.
The latest deals are predicted to have a favorable impact on KNOC's bid to gain development rights of petroleum fields in other Middle Eastern countries like Iraq for example, they said.
Korea has been putting more energy and resources into exploring energy resources, particularly petroleum. Korea has witnessed a number of tapping petroleum blocks soaring from 19 in 2004 to 24 in 2005 and 34 in 2006.
KNOC has played a leading role in undertaking Korea's own petroleum development projects. The corporation's goal is to become one of the world's top 50 petroleum companies by 2015 by capitalizing on the experiences and expertise it has accumulated in recent years not just in Korea but abroad. KNOC has succeeded in the development of the Donghae-1 gas filed in Korea in 2004, catapulting Korea to the world's 95th oil-producing country. Figures made available as of 2006 showed that KNOC is taking part in 32 exploration and production projects in 15 different countries. nw

Korea's petroleum exploration projects in Yemen

KNOC President Hwang Doo-yul