SK Corp, Taiwan's CPC Mull Stake in CNOOC's Kenya Oil Block

BEIJING Mar 15, 2007 (Dow Jones Newswires)

South Korea's SK Corp. (003600.SE) and Taiwan's CPC Corp. (CPC.YY) are looking at taking stakes in oil exploration blocks in Kenya awarded to China's CNOOC Ltd. (CEO) last year.

Officials from SK Corp. visited Beijing this week to review data on the blocks, but no decision had been made on whether to pursue a deal, a spokeswoman for South Korea's largest refiner said late Wednesday.

"We received an offer in January from CNOOC to buy a stake in its oil blocks in Kenya and have been reviewing the proposal," the spokeswoman said.

Separately, CPC confirmed that it was also interested in obtaining the oil blocks from CNOOC Ltd. and is conducting an initial study on the possible purchase.

"CPC is in the process of collecting information (about the Kenya oil fields) and the company will make a decision after this evaluation is completed," said Jessica Tang, division chief of CPC's press coordination department.

A spokeswoman for CNOOC Ltd., which is the listed arm of China National Offshore Oil Corp., wasn't available for comment when contacted.

CNOOC said last April that its CNOOC Africa Ltd. unit had signed production sharing contracts for six blocks in Kenya that span 115,343 square kilometers.

The six blocks - namely Block 1, Block 9, Block 10A, L2, L3, and L4 - are located in the three basins of Lamu, Anza, and Mandera.

The Kenyan block awards were made at a time of rapid expansion in Africa for CNOOC, which included the purchase of a 45% working interest in a Nigerian oil field for $2.27 billion, plus $424 million in expenses, two months earlier.

In Kenya, CNOOC currently owns more than a quarter of the exploration acreage and the Chinese company has described the East African country as having "attractive untapped exploration potential".

Copyright (c) 2007 Dow Jones & Company, Inc.


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