KNOC Continues to Take Over Oil Fields

State-run oil giant takes over Harvest Energy in Canada and Badra oil block in Iraq to expand oil reserves to 8.8 bln barrels.

Korea National Oil Corp. continues to expand its oil exploration operations in the world, having recently signed a contract to take over Badra oil block in Iraq on Jan. 28 on the heels of its take over of Jubair oil block also in Iraq, one of the largest oil blocks in the Middle East country with the estimated oil preserve of 6.3 billion barrels.
KNOC will be able to pump up 220,000 barrels of crude oil from Jubair oil block daily securing 200 million barrels of oil in the next 20 years, meeting 10 percent of Korea’s daily oil needs, KNOC officials said. KNOC has acquired the rights to pump 20 million barrels of oil in the next 20 years from Badra oil block, they said.
Jubair oil block located near Basra Harbor in the center of a large oil field in southern Iraq with an easy access to the harbor for shipment of oil, an area with no security problems.
Currently the oil well produces 195,000 barrels of crude oil daily, but the company plans to expand it to 1.2 million barrels per day to be able to meet 58 percent of the daily oil needs in Korea in the next seven year, the officials said.
KNOC plans to continue to explore and operate oil fields as they are acquired in cooperation with the Iraqi government and its national oil company, the company said.
The state-run oil company plans to shift its manpower more to the E&P sector to strengthen its operations, expand its investment in the area of gas and oil self-sufficiency, especially, the facilities for diametrical operation of the company’s gas exploration and distribution to make its operation bigger, the company said.
In the meantime, KNOC officially took over Harvest Energy Co. in Canada with 200 million barrels of oil and gas reserves and the oil refining facilities that can produce 115,000 barrels of oil per day, the company announced recently.
The oil company is located in Calgary, Canada, with its oil fields and oil refining plants spread over the Pacific side of the North American country over such states as Alberta, British Columbia, Saskatchewan. The company also has an oil sand exploration block and an oil refining plant in New Foundland.
Harvest Energy has 219.9 million barrels of crude oil in reserves and is able to produce 534,000 barrels of crude oil daily and refine 115,000 barrels of oil daily with its payroll listing 950 including 380 in the production sector, KNOC officials said.
On Jan. 20, KNOC officially took over Harvest Energy at a ceremony held at Palliser Hotel in Calgary with some 100 people including officials from both companies, dignitaries including Rep. Jung Jang-sun, chairman of the National Assembly Knowledge Economy Committee, the minister of the Alberta Sustainable Resources Development Ministry, officials of both Korean and Canadian governments and officials of related companies and President John Zachary of Harvest Energy.
KNOC President Kang Young-won, in his speech at the ceremony, said KNOC’s plan to expand its daily oil production to 300,000 barrels by 2012 and oil reserves to 2 billion barrels is within the range of possibility as the company has already took over Petro-tech in Peru and Sumbe Co. in Kazakhstan recently.
Rep. Jung Jang-sun, chairman of the Knowledge Economy Committee, in his congratulatory speech, said he hoped that KNOC would continue to expand its operation overseas to be a global oil concern with the take over of Harvest Energy with words of encouragement for the officials and staff of KNOC for their devotion to KNOC.
The legislator urged KNOC officials to explore oil in the oil wells secured around the world with a hitch, especially, oil wells owned by Harvest Energy that KNOC secured with the help of both Korean and Canadian governments.
In line with the KNOC plan for its globalization made official in June, 2008, the company will continue to expand its operations overseas by acquiring more overseas oil fields through M&As. KNOC has been able to increase its daily crude oil production by 79,000 barrels per day and oil reserves secured by 3.4 billion barrels, boosting Korea’s oil self-sufficiency rate to 8.1 percent from 7.4 percent in 2008, the company said. nw

KNOC President Kang Young-won, right, signs an agreement to take over Harvest Energy in Canada on Jan. 20 in Calgary, Canada.