S. Korea to Explore for Oil in UAE
Source: Bloomberg, Shinhye Kang and Ayesha Daya (8/2/10)
"S. Korea will have much larger presence in UAE's energy sector."
State-run Korea National Oil Corp. and Abu Dhabi National Oil Co. signed a preliminary agreement today at the headquarters of Anyang, South Korea-based KNOC, South Korea's Ministry of Knowledge Economy said today. They will form a team to study the possibility of exploring for oil and gas in Abu Dhabi and will discuss a plan for Abu Dhabi National to use storage facilities owned by KNOC, the ministry said in a statement.
KNOC is joining international oil companies such as Exxon Mobil Corp. and Royal Dutch Shell Plc that have traditionally been present in the country, the fourth-largest crude producer in OPEC. South Korea and the UAE are expanding economic cooperation after state-controlled Korea Electric Power Corp. beat General Electric Co. and Areva SA to win the emirate's first nuclear power plant contract in December.
"South Korea isn't in the 'Abu Dhabi club' of companies, such as Exxon and Shell that have big oil concessions and have traditionally won new contracts," Thaddeus Malesa, a Dubai- based analyst at PFC Energy, said. "The Koreans are going to have a much larger presence in the UAE, in energy and also in manufacturing, which is a direct result of the nuclear deal."
Abu Dhabi, holder of most of the UAE's hydrocarbon reserves, will be reviewing contracts for concessions held by foreign oil companies that are due for renewal within the next five years. It plans to boost oil output capacity to 3.5 million barrels a day, from about 2.8M.