중앙데일리

Korean firm acquiring a Canadian oil company

Oct 23,2009
Korea’s self-sufficiency in developing oil and gas is expected to improve with the acquisition of a Canadian energy company.

The Ministry of Knowledge Economy said yesterday that the Korea National Oil Corp. will purchase Canada’s Harvest Energy Trust for $4 billion. Harvest is headquartered in Calgary.

This is the largest amount any Korean company has paid to buy a foreign energy company.

The Korean state-run company will pay $1.8 billion in cash and assume $2.2 billion in Harvest Energy debt.

“With the current acquisition, Korea’s self-sufficiency in developing oil and gas will go up 1.8 percentage points to 8.1 percent,” said Kim Jung-gwan, the Knowledge Economy Ministry’s deputy minister for energy resources development. “This exceeds the 7.4 percent target set by the government earlier this year.”

Last year Korea imported 870 million barrels of crude oil.

Harvest Energy has crude oil and gas reserves of 220 million barrels.

Additionally, the Canadian company produces over 53,000 barrels of crude oil and gas daily and refines 115,000 barrels of oil in eastern Canada.

The Canadian company also has one billion barrels of oil sand.

Following the acquisition of Harvest Energy, Korea’s daily production of crude oil overseas will increase from the current 188,000 barrels to 241,000 barrels.

The Korean state-run oil company is planning to complete the Harvest acquisition, which needs approval of the Canadian government, by the end of this year. Kim from the Knowledge Economy Ministry said the Korea National Oil Corp. is currently examining three to four foreign energy companies. He said the firm would likely acquire one.


By Lee Ho-jeong [ojlee82@joongang.co.kr]



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