Korea National Oil Corp., beaten by China in the race to buy Geneva-based Addax Petroleum Corp., said its seeking to acquire overseas assets to boost production.
The state-run oil developer has identified five companies abroad as potential takeover targets, company spokesman Jeon Byong Hyuk said by telephone today from Anyang, South Korea, without naming the companies.
South Korea, Asia’s third-largest oil importer, may work with the nations $30 billion sovereign wealth fund to bid for energy assets, minister of Knowledge Economy Lee Youn Ho said last month. Korea National Oil may acquire an overseas oil company and increase output by 200,000 barrels a day, Yonhap News reported today, citing Chief Executive Kang Young Won.
Korea National Oil aims to expand its daily output to 300,000 barrels by 2012 from 70,000 barrels currently, Jeon said.
South Korea, China and India are looking to secure energy supplies after crude oil fell from an all-time high last year and made assets cheaper. Oil futures in New York have advanced 62 percent this year on signs the worst of the global recession has passed. Prices are still 51 percent below the record $147.27 a barrel reached in July 2008.
Chinese companies have spent at least $12.6 billion on oil assets overseas since December, including purchases in Singapore, Syria and Kazakhstan. China Petrochemical Corp., the parent of Asia’s largest oil refiner, agreed in June to buy Addax for C$8.3 billion ($7.7 billion).
We lost Addax, but we believe there will be better assets, the minister of Knowledge Economy said last month. Still, acquiring oil assets needs a lot of money so the government is trying to raise funds from private investors and team up with state-run financial institutions.
A South Korean consortium led by Korea National Oil plans to start exploring the Bazian well in northeastern Iraq late this month or in early October to get an estimate of how much oil it holds, Jeon said today.
In 2007, the Korean consortium, which includes SK Energy Co., signed a production-sharing contract with Kurdistan regional government for the Bazian block. Korea National Oil has a 50.4 percent stake in the block while SK Energy has a 15.2 percent interest.