SK Energy's Jackpot

Oil company to pump 20,000 bbls of oil from its offshore oil block in Brazil

SK Energy will soon pump oil from its offshore oil well off the coast of Brazil, the oil company said, adding that the new oil well will produce 20,000 barrels of oil per day from July 28 and will be increased to 50,000 barrels per day next year.
The company said it got the permission from the host government to start the commercial operation of the BMC-8 mining district from July 28, which the company put in 7 years of exploitation to find oil in the oil block.
The crude oil will be shipped to Korea from October and the oil block explored with the investment of $160 million by SK Energy including $27 million in loans from the government provided to overseas exploitation of natural resources. SK Energy has 40 percent stake in the oil venture and its share of oil comes to 22.4 million barrels.
The energy company plans to operate the oil well for 7 years and oil production will be increased to 30,000 barrels per day by the end of this year and 50,000 barrels next year.
The company is engaged in the exploration in the BMC-30, 31 mining blocks of Brazil.
The oil production from the new well will expand the rate of self-supplied oil to 115,000 barrels per day from 95,000 barrels per day. It also pushed the rate of self-exploration of oil and gas overseas to 3.9 percent from 3.2 percent.
In the meantime, SK Energy has stepped up its effort to search for oil wells overseas by winning the right to explore oil in the Peruvian oil block as well as the right to participate in the oil exploration block in Vietnam.
The company said it participated in the international bidding for the exploration rights to the 19 mining blocks in Peru and won the 100 percent right for Z-46 mining block, adding another oil block to its oil exploration venture in the South American country.
Company officials said they feel the new oil offshore block has a great possibility to contain oil because it is located next to the oil block recently discovered with large oil reserves. Currently, the oil company operates the Cammisea oil field and No. 8 mining block in Peru, producing 80,000 barrels of oil from the two oil blocks and expects to tap oil from the new offshore oil block and the No. 56 oil block which is being worked on to produce oil next year. The company is engaged in the construction of a LNG plant in Peru, which is expected to go online in 2010.
On a different note, the company has won recently the license for investment from the Vietnamese government for production sharing contract on the Vietnam 15-1/05 mining block, which the company is working on based on a contract with PetroVietnam.
The acquired license will enable the company to firmly secure its stake in the Vietnamese oil block and spur its natural resources exploration activities in the southeast Asian country.
The company now is exploring for oil in 26 oil blocks in 14 countries with the acquisition of Peru's Z-46 block with exclusive rights and the Vietnam oil block.
SK Energy officials said the company projects to plow 540 billion won in oil exploration projects this year, stepping up its efforts to secure natural resources around the world to strengthen the country's energy security.
The winning 100 percent rights to the Z-46 block in Peru is bringing the strategy to achieve "no resources oil producing country"target a step closer to realization.
SK Energy will begin tapping the 4th oil block in North Sea for oil for the first time in Europe and the company expects to commercially produce oil from the second half of next year. The company expects its sales in Europe this year would reach 600 billion won from the sale of lube oil, and crude oil. SK Chemical projects its sales to amount to 200 billion won this year including the sales of the products produced by its subsidiary in Poland, SK Eurochem.
The group wants to turn Europe into its domestic market like it did with China and the results would soon show up as SKC and SK telecom step up their operations to expand sales in Europe. SK Corp. at the same time, is expanding overseas presence to all parts of the Asian region, centering around China with a mid- and long-term goal of repositioning itself as a major in the Asian-Pacific region.
As SK Corp. Chairman & CEO, Chey Tae-won, has repeatedly urged his staff to "push ahead with overseas projects without fear of a failure," SK Corp. is striving to crack the global market in search for tangible fruits arising from the implementation of its active overseas projects. Chairman Chey's drive for overseas market exploration has led to exports worth more than $10 billion for the second successive year last year, accounting for half of the 2006 sales. nw

Chairman Chey Tae-won of SK Energy Co.