South Korea Shifting Away From Exploration, Will Pay More For Proven Oil Reserves -

[hatrack]

SEOUL – South Korea will change tactics in its increasingly urgent quest for overseas energy assets this year, targetting more costly but proven oil reserves after years of pursuing high-stakes exploration acreage.

Seoul, impatient with the five or more years required to bid for rights, drill wells and fund billion-dollar projects, is on the hunt for fields already in production or nearly completed to close the gap with its chief rivals, China and India. said government officials familiar with the strategy.

The country hopes early this year to seal its biggest-ever overseas acquisition, a $2 billion buy-in to an undisclosed oilfield in North America, a source involved in the deal told Reuters last week, declining to give further details. The deal, likely to team state-owned Korea National Oil Corp. (KNOC) with public Korean oil or trading firms, would be the country's first direct purchase of a producing asset.

Although oil produced in the Americas is unlikely to be shipped back to South Korea, the flows would go some way to helping Seoul achieve its target of producing 18 percent of its oil needs from Korean-owned oilfields by 2013.

EDIT

http://www.signonsandiego.com/news/business/20070115-0152-korea-oil-investments.html

[Nihil]

1. Slightly confused here ...

> The country hopes early this year to seal its biggest-ever overseas
> acquisition, a $2 billion buy-in to an undisclosed oilfield in
> North America, ...
>
> Although oil produced in the Americas is unlikely to be shipped back
> to South Korea, the flows would go some way to helping Seoul achieve
> its target of producing 18 percent of its oil needs from Korean-owned
> oilfields by 2013.

Does this mean that they're buying (some of) a US oilfield and will be
trading "their" output from this against a matching amount currently
being extracted by a US company from a South Korean oilfield?

If so, this sounds a very smart move as both parties will save on
transportation costs (or is this sort of trade too abstract for the
real-world balancing?).

If not, can someone please take pity on a bear with little brain?
:shrug: