KNOC, Other South Korean Cos to Jointly Develop Canada Oil Sands

SEOUL Mar 16, 2007 (Dow Jones Newswires)

State-run Korea National Oil Corp. said Friday it has signed an initial agreement with 13 other South Korean companies to jointly develop blocks in Canada's oil sands.

The companies will seek opportunities to secure other downstream projects such as building oil refining facilities and pipelines, KNOC said in a statement.

They'll also try to buy oil sand blocks and take over small energy companies in Canada, it said.

"We need to cooperate with other (South Korean) companies to share funds, technology and information to compete with other global rivals in developing energy sources," it said.

Given recent geopolitical volatility in the Middle East and soaring international oil prices, South Korea, like China and India, is seeking to diversify its energy sources. In particular, it is looking to bolster its energy security by tapping into resources that it owns or intends to acquire overseas.

South Korea aims to raise its oil output self-sufficiency level to 18% in 2013 from 4.1% in 2006.

The 13 companies include Korea Electric Power Corp. (015760.SE), Posco (005490.SE), GS Caltex Corp., Hyundai Engineering & Construction Co. (000720.SE) and Daewoo International Corp. (047050.SE).

The group aims to secure oil sand fields that can produce as much as a combined 100,000 barrels of oil a day by 2015, KNOC said.

In July 2006, KNOC purchased the BlackGold oil sands block in Alberta, which contains 250 million barrels in oil reserves, it said.

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