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Koreans quick to probe oil sands lease
As part of a global drive to control its crude oil supplies, the South Korean government’s oil company is wasting no time pushing ahead with plans to develop its 9,600 acre oil sands lease in Alberta.
The Canadian subsidiary of state-controlled Korea National Oil Corp. has drilled 15 core holes on the property in the six months since it acquired the potential 250-million-barrel prospect from Newmont Mining for US$270 million, and plans another 18 wells to go along with a three-dimensional seismic program this winter to get a better fix on the prospect.
KNOC Canada chief representative Jin Hyung Song told a Calgary conference the timetable for the Black Gold project involves filing a regulatory application in 2008 and, pending approval, starting construction of the C$750 million facility in 2009.
Initial production is scheduled for 2010, with a goal of 30,000 to 35,000 barrels per day.
KNOC Canada sole operator Although KNOC Canada is the sole operator, Song indicated the company, because of its inexperience in the oil sands, might be open to asset swaps or other arrangements to gain access to technology.
He said the company may also buy natural gas assets to hedge the cost of gas needed to fuel the thermal-recovery project and is trying to decide whether to build or purchase facilities to upgrade raw bitumen.
Black Gold production would initially be sold into the North American market, but the eventual hope is to have output shipped by tanker to Korean refineries.
The best hope for now is Enbridge’s planned Gateway pipeline, which could involve tanker shipments of 300,000 bpd to Asian refineries, but it has been slowed by complex negotiations to obtain long-term shipping commitments with Chinese partners.
Song said his company has set a goal for 2015 of acquiring 2 billion barrels of reserves and production of 380,000 bpd to improve its energy security.
To date, it is involved in 28 projects in 15 countries, of which 18 are exploration projects, he said.
In a new energy vision released in December, the government set its sights on meeting 35 percent of its energy requirements from overseas oil and gas assets compared with just 4.1 percent in 2005, while cutting its dependence on crude oil for energy supply to 35 percent from 44.3 percent by hiking its use of renewables and nuclear power.
—Gary Park
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