South Korea ready to buy oil sands lease

While China openly grumbles about not being able to get a fair shake in its attempts to form an alliance with a major oil sands producer, South Korea has quietly negotiated the purchase of an oil sands lease holding 250 million barrels.

The South Korean commerce ministry said it will make the purchase of the assets in the Cold Lake area, south of the primary Athabasca deposit, later in July as part of its effort to shore up domestic oil supplies.

The state-owned Korea National Oil Corp. is expected to start construction of a production facility that will come on stream in 2008 and reach full-scale operations in 2010. The deposits allow for output of 20,000-30,000 barrels per day over 20 years. The purchase price and capital outlay are being kept under wraps for now.

The world’s fourth-largest crude oil importer, South Korea aims to raise its self-sufficiency level from 4 percent to 18 percent by 2013.

A spokesman for the country’s energy resources division said that if South Korea can acquire more oil sands properties it will consider establishing an upgrading facility in Canada.

—Gary Park