KNOC eyes energy blocs in Ghana

Korea on Friday publicly announced her interest in Ghana’s new find oil an dgas.

A team of oil experts from Merrill Lynch led by the President and Chief Executive of Korea National Oil Corporation (KNOC), Mr. Young-Won Kan is currently in talks with the Energy Minister, Dr. Joe Oteng-Adjei and the technical experts of Ghana National Petroleum Company (GNPC) to bid for Kosmos Energy’s thirty percent (30%) stake in the giant offshore Jubilee field.

Korea now joins China and India as they search to expand and deepen their footprint in West Africa.

After the failure to win original contracts in Ghana, a new policy of buying established equity assets is being enacted to secure burgeoning oil reserves by the Asian powers.

In August 2008, a team of Chinese officials led by China People’s Political Consultative Committee heavyweight Zhu Welin, arrived in Ghana to secure extraction rights to oil blocks on behalf of the China National Offshore Oil Corporation (CNOOC). The company had previously failed to find oil in one of the exploration blocks in which Tullow were later successful. Chinese officials were understood o be greatly aggrieved by the missed opportunity. The decision to send senior officials to Ghana in order to take their claim shows the importance Beijing places on Ghana’s oil contracts, according to the China-africa.com.

Talks of a stake sale have been in the news ever since a dispute broke out over technical data sharing. Players in the oil industry have been tracking this development, since the stake in the Jubilee field has huge prospects.

Jubilee field which is forecast to begin commercial production in the fourth quarter of this year, has recoverable reserves of 800 million barrels according to Dr. Oteng-Adjei.

CNOOC had enlisted Goldman Sachs in an advisory capacity to help them in their pursuit of the stake but the deal is said to be hanging when Kosmos Energy last month announced its plans to enter into drilling. India’s Oil and Natural Gas Corporation (ONGC), US based Exxon Mobil, Chevron Corp, Royal Dutch Shell, ENI of Italy and Chinese Sinopec are among bidders in the said Kosmos Energy’s stake worth $4 billion.

The increase in taking over equity assets in the successful western companies that won contracts in the oil fields shows that Ghana is still a top priority for the Asian tigers that have resorted in building flagship projects in order to win the government’s heart to secure contracts in the country’s oil industry.

Ghana’s new found oil and gas continues to be an attractive destination for developed economies as a substitute for conflict ravaged Middle East.

Korea had learnt at first hand about Ghana’s oil find when a team of energy experts visited KNOC last year.

According to Mr. Kan, Korea’s interest in Ghana’s oil and gas became eminent early this month when the Vice President, John Mahama led a delegation to strike a 2,000 housing units for the law enforcement agencies with the Korean Government.

He told the Ghanaian team that his outfit is interested to tie-up with the GNPC to put in their bid for Kosmos Energy’s stake.

But will this partnership work since the GNPC is extremely keen to buy Kosmos stake with financing proposal from the Chinese Government?

Dr. Oteng-Adjei in a discussion however told the Korean delegation of a number of blocs he believes they can enter into to explore oil. He told the delegation that his outfit is particularly interested in working together with state run oil institutions since they have the experience in using the revenue generated from the oil and gas to the benefit of the citizenry.

He outlined the principles of managing the oil and gas industry in the areas of; transparency and integrity, local content and job creation whilst stressing much on environmental safety.

“In their respective countries, companies do their very best to protect the environment but renege when they enter into other countries. The only legacy we can give to our grandchildren is the environment,” he noted.

Korea consumes three million barrels of oil annually, a vital strategically important component driving the national economy. Korea is the world's fourth-largest oil importer and the sixth-largest oil consumer. So, a stable supply of petroleum is fundamental to the well being of the Korean economy, for its future development and for its status in the world market place. Korea National Oil Corporation was established in 1979 and its founding principle is to secure oil supplies for the nation, by exploration for and development of oilfields, by holding petroleum reserves and by building a national distribution network.
For the last quarter of a century, KNOC has invested in petroleum development in Korea and twenty-one countries overseas in order to acquire its own independent sources of supply. KNOC currently operates in Nigeria.