We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Thu 14 Feb 2008 10:58 AM

Font Size

- Aa +

S. Korea secures Kurdistan oil deal

Second South Korean consortium strikes oil deal with Kurdish region, risks reaction from Baghdad.

A second South Korean consortium has struck an oil deal with Iraq's Kurdish region, risking a sharp reaction from Baghdad but boosting shares in Ssangyong Engineering & Construction, which will lead a linked $12 billion construction programme.

The Iraqi government last month halted oil exports to South Korea's top refiner SK Energy and Austria's OMV AG in response to what it says are illegal oil exploration deals with the Kurdish regional government.

Korea National Oil Corp (KNOC) said a consortium it is leading has secured rights to explore an oil field in Kurdistan in exchange for a construction project by South Korea's builders.

KNOC led another consortium including SK Energy which secured exploration rights from the Kurdish regional government for the Bazian oilfield, triggering Baghdad's export halt.

Shares in Ssangyong jumped nearly 15% to 21,000 won by 0245 GMT, leading the Kosdaq's 1.7% rise. The company said building projects include a 2 trillion won ($2.1 billion) highway programme and 10 trillion won for waterworks, petrochemical plants and hospitals.

It did not specify a timeframe or say how much would be paid to the builders' consortium.

KNOC said the deal would help South Korea, which is almost wholly reliant on crude oil imports, secure foreign energy resources while paving the way for construction companies to win more orders in Iraq.

Korean daily newspaper Dong-a Ilbo said the oil field, whose location was not identified, was estimated to hold 800 million to 1 billion barrels of oil. South Korea is investing in overseas exploration projects as well as buying assets or companies that are already producing oil.

Iraq accounted for about 4% South Korea's total crude imports last year. (Reuters)

Digital magazine: Read the latest edition of Arabian Business online

For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.