Dana Strikes Oil in Egyptian Block

Korea National Oil Corporation (KNOC)’s efforts to expand exploration for petroleum overseas have gained ground following its recent acquisition of the U.K.-based petroleum developer Dana Petroleum this past September.
The Ministry of Knowledge Economy (MKE) said an experimental drilling of the South October Mining Block near the Suez Bay discovered a crude oil reserve with a capacity of roughly 1,343 barrels per day. Dana Petroleum owns a 65 percent stake in the mining block while Inpex of Japan has a 35 percent interest.
Jun Min-young, director of petroleum development at the MKE, said Dana Petroleum launched the experimental drilling on Oct. 7 and dug 4,300 meters below the surface and test-produced an estimated 1,343 barrels of crude oil by Nov. 14.
The latest discovery of crude oil reserves was the first one since KNOC acquired Dana, said KNOC officials, adding that it will likely contributed to raising the daily crude oil production by Dana Petroleum from the Egyptian mining block, which now stands at 7,000 barrels per day.
The probable reserves of the mining block are estimated at approximately 20 million barrels, some 112.7 million barrels of which is owned by Dana. A KNOC official said, “The latest discovery of crude oil is expected to expedite Dana Petroleum’s exploration at its own mining blocks in Africa, and details including its exact reserves and development and production plans will be determined based on the outcomes of additional future assessment drillings.”
Dana Petroleum, an oil exploration firm based in Aberdeen, Scotland, owns oil reserves and rights amounting to 700 billion barrels in exploration estimates in 52 mining blocks.
KNOC’s acquisition of Dana Petroleum was the first case of a hostile takeover by a Korean state-run company through stock trading in a foreign country.
In a filing with the London Stock Exchange and on its website, KNOC said it managed to secure 64.26 percent of Dana shares from its existing shareholders and obtained regulatory approval from the U.K. government.
Following its purchase of a 29.5 percent stake in Dana Petroleum on Sept. 17, KNOC received approval to buy a combined 34.74 percent stake from shareholders with a deadline of Sept. 23, bringing to 64.26 percent KNOC’s total purchases of shares from Dana Petroleum shareholders.
Earlier, KNOC said it would raise Korea’s own petroleum development rate from the current 9 percent to closer to 10 percent, a double digit the nation will record for the first time in its history of petroleum exploration. It will likely expand KNOC’s petroleum exploration centers from the Americas and former Soviet areas to the North Sea and Africa, KNOC officials said. nw

Korea National Oil Corp. (KNOC) makes headway in expanding overseas exploration for petroleum. (Left) KNOC President Kang Young-won