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S Korea Consortium To Invest $2 Billion To Develop 3 UAE Oil Fields -Government

Published: March 5, 2012 | 9:59 am
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SEOUL – State-run Korea National Oil Corp., or KNOC, and private company GS Energy Corp. will invest a combined $2 billion to develop three oil fields in the United Arab Emirates, the Ministry of Knowledge Economy said Monday.
The two companies formed a consortium that will hold a 40% stake in the project, with KNOC taking a 34% stake and GS Energy 6%, the ministry said in a statement. The consortium signed a final agreement Monday, it said.
The $2 billion figure doesn’t include the cost of the stakes.
KNOC and GS Energy will jointly explore and develop the oil blocks with the Abu Dhabi National Oil Co., or ADNOC, and expect to begin production as early as 2014, the ministry said.
The partners expect to produce as much as 43,000 barrels a day, of which 17,000 barrels will be South Korean companies’ to take. At times of emergency, however, the South Korean companies will have the right to take all of the daily output, it said.
The development is expected to cost a total of $5 billion.
Monday’s announcement came about a year after KNOC and ADNOC signed a contract outlining the heads of terms for the development of three oil fields–two onshore and one offshore–in the U.A.E.
A GS Holdings Corp. (078930.SE) affiliate was chosen as a partner in October from among a pool of interested local companies, an official at the ministry’s resources development division said by phone. GS Energy was established as a GS Holdings spinoff this year.

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