Securing 2 Bln Barrels of Oil Reserves

KNOC's 3020 target calls for the production of 300,000 bbls. daily by 2012 to expand its operation

Korea National Oil Corp. (KNOC), set a strategic target for this year called "Great KNOC 3020," which aims at boosting crude oil production to 300,000 barrels daily in 2012 and securing oil fields with reserves of 2 billion barrels.
In a bid to expand the scale of its operation, the state-run oil firm set out in 2008 to take over oil exploration companies in various regions and countries around the world such as the United States, Peru, Canada, Kazakhstan, and Great Britain, among others, and brought the ratio of self-sufficiency in oil and gas supply to 10 percent of Korea's daily needs.
KNOC, however, has not been working exclusively on the exploration of oil fields overseas; the company has been using part of its operation to help SMEs achieve co-prosperity or mutual growth to the extent that it launched a special task force to exclusively take charge of the mutual growth policies with SMEs.
The task force has been working on spreading the co-prosperity culture with SMEs inside the company a step ahead of the government, the initiator of the idea. The company has been intentionally buying supplies from small vendors in keeping with its policy to grow together with SMEs, along with a program to cut costs and to develop new technologies in order to boost profits as part of its mutual growth scheme.
The company picked 11 projects in five area of its operation worth 17.5 billion won for sharing credit for their successes, including the security of crude oil storage.
Through these projects, the company aims to secure high-quality services from SMEs, while SMEs can have stable sales channels and profits along with adequate manpower for the projects at the same time. Under the project, KPHE Co. succeeded in localizing the production of the cooling facility for crude oil pumps in 2009, saving some 900 million won in import costs and strengthening the capability of SMEs.
KNOC was established in 1979 as a state-run oil company to secure a stable oil supply after the two oil crises of the 1970s. It also carries out energy projects on behalf of the Korean government that private companies cannot perform, as there still is the structural vulnerability of another oil crisis.
Since it has had the ability to explore oil fields on its own since the late 1980s, it has participated in several oil drilling projects at home and abroad. KNOC succeeded in developing a commercial gas deposit in the Donghae 6-1 gas field and producing natural gas and condensate. It made Korea an oil-producing country.
Since the 1990s, KNOC has been actively engaged in overseas oil projects. As of the end of February 2011, it has been engaged in 191 projects in 25 countries. KNOC made itself known worldwide by successfully engaging in production after developing the 15-1 and 11-2 blocks in Vietnam with its own capital and proprietary technologies.
Under the strategic goal of "GREAT KNOC 3020," it scaled up projects to increase daily output to 300,000 barrels and reserve deposits to 2 billion barrels. Since it successfully took over U.S. Ankor in 2008 as well as Peru's SAVIA PERU, Canada's Harvest and Kazakhstan's Sumbe in 2009, and the UK's Dana in 2010, it has substantially contributed to the increase in the country's self-sufficiency rate of oil supply.
KNOC has a storage capacity of 146 million barrels through the operation of nine petroleum stockpiling bases around the nation, enabling it to respond effectively to significant shifts in supply and demand. Its ability to operate stockpiling bases led to successful international joint stockpiling deals and makes Korea Northeast Asia's center for oil logistics, which will be a new growth engine for Korea.
Furthermore, KNOC is securing next generation energy sources by engaging in extensive exploration of the polar regions, remote areas and deep seas, and conducting research in oil sands, a non-traditional petroleum source. It is also providing timely information on oil prices and national energy policies to the citizenry through an oil information network called Petronet (www.petronet.co.kr), a comprehensive gas station information system (www.opinet.co.kr), and publications. nw

President Kang Young-won of Korea National Oil Corp.

Photo on courtesy of KNOC