KNOC, Ecopetrol Jointly Acquire Peruvian Oil Co in Overseas Strategy

Korea National Oil Corporation (KNOC) and Ecopetrol S.A. have completed the deal to acquire Offshore International Group Inc., headquartered in the United States. The total transaction amounted to US $900 million (50% Ecopetrol and 50% KNOC).

The main asset of Offshore International Group is Petro-Tech Peruana S.A., engaged in exploration, development, hydrocarbon production and gas processing activities in Peru. It began to operate in January 1994 in the North coast of Peru, in block Z2B, and its current crude average production is close to 12,000 barrels per day, with estimated 2P reserves of over 100 million barrels.

In recent years, this company has strongly positioned itself in offshore hydrocarbon exploration and production in Peru. The company has 11 blocks in Peru (1 production and 10 exploration), which altogether add up to one of the largest offshore areas in South America (9.5 million hectares). As of November 2008, the revenues and net profit of the company amounted to US $359 million and US $134 million respectively.
Offshore International Group, Inc also has a holding in other companies that provide essential services in the exploration and production activities of Petro-Tech Peruana S.A., particularly related to marine operations (drilling, diving and maritime transport services).

This acquisition is an evidence of the confidence that Ecopetrol and KNOC have in the Peruvian economy, its institutions, and its potential in the petroleum industry. Both companies intend to make further investments in coming years to thus increase hydrocarbon production and reserves. One of the main goals is to more than double the production volume within the next three years.

Ecopetrol is Colombia's largest integrated oil company and is among the top 40 oil companies in the world and the four largest oil companies in Latin America. Besides Colombia, where it accounts for 60% of total production, the Company is involved in exploration and production activities in Brazil, Peru and the United States (Gulf of Mexico).