State Companies to Acquire ‘Proven’ Gas Fields Abroad
By Ryu Jin
Staff Reporter
South Korea’s state-run energy corporations are likely to go abroad more actively to acquire ``proven’’ oil and gas fields as well as potential ones as part of efforts to raise the country’s self-sufficiency in the key resources, according to sources Sunday.
Officials from the presidential transition committee said that the incoming Lee Myung-bak administration’s blueprint for the acquisition of energy resources has been drawn up under the guidelines of the president-in-waiting.
Outlined by a task force under the transition team, the plan encourages state-run firms such as the Korea Gas Corp. to merge and acquire companies that control gas fields where deposits have already been confirmed.
South Korean firms ― public or private ― have so far focused their investment largely on exploration projects that have potential to produce oil and gas. But the new plan calls for bolder approaches including mergers and acquisitions (M&As).
As for proven fields, it usually takes 2 to 3 years for companies to begin the production of gas for commercial use. So the self-sufficiency in natural gas could be raised in a very short period of time.
``We have been considering aggressive M&As for gas fields in the stage of deposits confirmation,’’ an official from the task force said. ``We have been reviewing a list of specific gas fields for purchase.’’
South Korea aims to raise the self-sufficiency in gas and oil to 28 percent of the total domestic demands by 2016. According to the Ministry of Commerce, Industry and Energy, the figure stayed at around 3.2 percent in 2006 and 5.7 percent last year.
In the meantime, other experts in the presidential transition team said, the proposed idea of bringing Russia’s natural gas to the country through pipelines is also picking up speed.
``My top priority will be given to talks on the development of natural resources and oil fields in eastern Siberia,’’ Rep. Lee Jae-oh, a close ally to the President-elect, said before departure for Moscow as the special envoy of the incoming head of state.
Eastern Siberia emerged as a strategic point of the incoming administration’s resources development as Lee, the President-elect, is said to have had interest in energy resources of Russia since he was a chief executive of a private construction company.
Lee, who pledged to revive the economy through business-friendly policies, has also made it clear that one of the key roles of his first prime minister will be the ``energy diplomacy.’’
``I think that there will be consultation with Russia in the first half of this year for the acquisition of Siberian gas,’’ a government official said. ``Beside, there will also be talks on the oil fields in the western part of Kamchatka soon.’’