South Korea’s Oil Major Seeks “Sweeter Deal” for Russian Oil Project

Text of report in English by South Korean newspaper The Korea Herald website on 5 September

[Lee Sun-young: "KNOC Seeks Sweeter Deal for Russian Oil Project"]

Korea will not hurry to participate in the development of an offshore oil field in western Kamchatka, Russia, unless it serves its interests, the head of the country’s state-run oil firm said yesterday.

“Securing stakes in offshore fields is a top priority for us, but that doesn’t mean that we should pursue blindly overseas oil development projects even if they don’t sufficiently serve of our interest,” Kang Young-won, CEO of Korea National Oil Corp., told reporters.

The KNOC is currently in talks with Rosneft, Russia’s state-run oil company, to revive a project to explore and develop the West Kamchatka field. The original deal fell through last month.

Kamchatneftegaz, a joint venture established as part of the original contract, lost rights to explore the field, after it failed to meet a deadline to carry out exploratory drilling. Rosneft had a 60 per cent stake in the venture, with the KNOC-led Korean consortium holding the remaining 40 per cent.

Kang said attributed the failure to solely Rosneft’s and that his company will seek to recoup costs incurred on the side of KNOC.

The Korean firm received a new offer from its Russian counterpart to revive the project, he said. “But we made a counteroffer that upholds our interests to Rosneft,” Kang said.

A former CEO of Daewoo International, Kang took over the oil company in August.

Originally published by The Korea Herald website, Seoul, in English 5 Sep 08.

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