KOGAS to Explore for Gas in Iraq

State-run gas firm secures right to explore for gas in the Zubair Oil Field in Iraq as a member of an international consortium

The Korea Gas Corp. (KOGAS), as part of the ENI consortium, won the right to explore the Zubair Oil and Gas Field in Iraq, estimated to contain 3.7 billion barrels of gas reserves, through a public bidding, the Ministry of Knowledge Economy said recently.
The oil and gas field is located near Basra in the southern part of Iraq, which is likely to contain more oil and gas reserves than what the Iraqi government announced, according to an ENI analysis of the projected oil field, MKE officials said.
The ENI consortium participated in the initial bidding on the right to explore the Zubair Oil Field on June 30 based on its priority rights and continued on to negotiate the details of the bid until Oct. 13 when both sides finally came to an agreement.
The final agreement is expected to be signed within two weeks of the initial agreement date, but details were still open, officials said. The official agreement is expected to be signed in the middle of November.
KOGAS has invested a total of $500 million in the new oil and gas fields to join the consortium and to secure 145 million barrels of crude oil in the next 20 years of exploring and pumping up crude oil from the new oil field. Other members of the consortium include Occidental Oil of the United States and Southern Oil Co. of Iraq, among others.
KOGAS will invest a total of $5 billion to secure a 20 percent share of the oil field, which will come to 145 million barrels of oil in the next 20 years.
The Zubair Oil Field is one of numerous oil fields in the Basra region, which currently produces 195,000 barrels of oil daily and the ENI consortium with KOGAS plans to make the Zubair Oil Field capable of pumping 1.25 million barrels of gas daily in seven years.
Under the plan, KOGAS would be able to secure 20,000 barrels of oil and gas daily on average and 60,000 barrels at a maximum until 2030, for a total of 14.5 billion barrels, the MKE officials said.
KOGAS is the first Korean firm to participate in the exploration of oil and gas fields in Iraq and it will play the role of a bridge, paving the way for other Korean oil and gas companies to make inroads into the war-torn country.
KOGAS plans to participate in the second bidding for the rights to oil and gas fields in Iraq scheduled to be held in December to secure additional fields for exploration. The Iraqi government plans to put up 10 oil fields for public bidding including Marjoon, estimated to contain 11.8 billion barrels of oil, West Ouma2, expected to contain 6.7 billion barrels, and Halfaya, said to contain 4 billion barrels, among others.
KOGAS plans to expand its investments in gas and oil exploration and the number of staff in the sector for it to be able to undertake the projects on its own and to secure stable sources of oil and gas.
Kang Nam-hoon, director in charge of natural resources development oil fields at the Ministry of Knowledge Economy, said Kogas will pave the way for Korean oil exploration firms to make large-scale inroads into the Basra region, containing the largest oil reserves in Iraq.
KOGAS, since its incorporation in 1983 with goal of supplying natural gas to the people of Korea, has been working around the clock in putting forth its utmost efforts in order to stably supply safe, natural gas to Korea, which until then was a barren land for natural gas. Through such efforts, KOGAS, in the midst of affection and concerns of Koreans over the last 20 or so years, has continued to progress to become a global energy corporation with the world’s largest capabilities for purchasing of LNG and facility operation.
KOGAS is currently confronted with an era of drastic changes due to the rapid stagnation of the global economy and changes in the international energy market. Domestically, the company is confronted with demand for a diverse range of changes including the visualization of the introduction of a competitive system and improved efficiency in public corporations in accordance with plans for the advancement of the gas industry. KOGAS is determined to continue its efforts towards the goal of establishing “KOGAS that cooperates with the world and grows along with the people of Korea” through changes and innovations in the era of rapid changes.
The purpose of the existence of KOGAS is to safely and stably supply clean and convenient natural gas to all the people of Korea at low cost. In order to share the benefits of supplying economical and safe natural gas to the entire population of Korea, the company is planning to expand its supply network to the regions that are yet to be connected, which will benefit an additional 4.3 million households, and establish and operate an advanced safety management system by 2013. In addition, the company will continually expand its storage facilities including the construction of the fourth production base of the corporation in Samcheok in order to reduce the cost of importation and supply as well as to achieve stabilization in supply and demand. nw