South Korea's GS Energy gets 3 pct stake in UAE oil concession (updated)

GS Holdings

13/05/2015 12:44

(updates with ADNOC statement, background) 
    * $676 mln stake to secure S.Korea's biggest oilfield assets 
    * Asian, Western firms bid for UAE's biggest oilfields 
 
    By Stanley Carvalho and Hyunjoo Jin 
    ABU DHABI/SEOUL May 13 (Reuters) - State-run Abu Dhabi 
National Oil Company (ADNOC) has signed a 40-year deal with GS 
Energy, selling the South Korean firm a 3 percent stake in an 
onshore oil concession to develop the United Arab Emirates' 
(UAE) biggest oilfields. 
    The $676 million deal is the latest move by an 
import-dependant Asian country to secure energy supplies. The 
stake will be South Korea's single biggest oil asset, providing 
around 800 million barrels over the 40-year period.     
    Nine Asian and Western companies have bid for stakes in the 
Abu Dhabi Company for Onshore Oil Operations (ADCO) concession 
after a deal with Western majors dating back to the 1970s 
expired in January 2014. 
    GS Energy joins Japan's Inpex Corp  1605.T  and France's 
Total  TOTF.PA  in winning contracts so far to develop the 
oilfields, which produce 1.6 million barrels per day (bpd) and 
have a target of 1.8 million from 2017.  ID:nL4N0XO04T  
    "By this agreement, Korea's GS E&P Ptd Ltd, a wholly-owned 
subsidiary of GS Energy Corp, receives a 3 percent participating 
interest in the new concession with effect from 1 January 2015," 
ADNOC said on Wednesday. 
    GS Energy said it was paying 743 billion won ($676 million) 
for the stake.  ID:nL3N0Y44JF  
    Four oil majors -- ExxonMobil  XOM.N , Royal Dutch Shell 
 RDSa.L , Total and BP  BP.L  -- had each held 9.5 percent 
equity stakes in the ADCO concession since the 1970s. 
    After the deal expired last year, state-run ADNOC took 100 
percent of the concession as political leaders in Abu Dhabi 
weighed up whether to bring in Asian firms or stick with old 
partners, industry and diplomatic sources said. 
    Shell and BP have also put in new bids, while Exxon has 
decided against bidding, sources have told Reuters. 
    Total became the first oil major to renew the concession, 
putting peers under pressure to improve terms after the local 
partner said the French firm made the best offer. 
    Other bidders for the concessions include Occidental 
Petroleum Corp  OXY.N , Italy's ENI  ENI.MI , China National 
Petroleum Corp, and Norway's Statoil  STL.OL . 
    GS Energy, owned by GS Holdings Corp  078930.K.S , has a 50 
percent stake in South Korea's second-largest crude oil refiner, 
GS Caltex Corp, with U.S oil major Chevron Corp  CVX.N  holding 
the other half. 
    The ADCO purchase would "greatly contribute to stable energy 
supplies" in South Korea, GS Caltex said in a statement. 
    Abu Dhabi, capital of the UAE, a core Gulf OPEC member, is 
spending billions of dollars to boost crude oil production 
capacity to 3.5 million barrels per day by 2017 from around 3 
million bpd currently. 
 
 (Editing by Rania El Gamal and Mark Potter) 
 ((stanley.carvalho@thomsonreuters.com; + 9712 6444431; Reuters 
Messaging: stanley.carvalho.thomsonreuters.com@reuters.net)) 
 
Keywords: EMIRATES SEOUL/OIL