Korea Oil looks to buy foreign oil company

Korea National Oil Corp., beaten by China in the race to buy Geneva based Addax Petroleum Corp., seeks to acquire an overseas oil company this year to increase its crude oil production.

The state-owned firm is looking to buy a company producing between 50,000 and 60,000 barrels of crude oil a day, Chief Executive Kang Young-won told lawmakers today. The energy developer is already in acquisition talks with five companies, Kang said.

State-run energy developers may team up with private companies including SK Energy Co., the nation’s biggest refiner, and the country’s $30 billion sovereign wealth fund to secure energy assets abroad, the Ministry of Knowledge Economy said on Oct. 6. Korea National Oil aims to expand its daily output to 300,000 barrels by 2012 from 72,000 barrels currently.

“We will get results from the talks soon,” Kang said, without naming target companies.

Korea National Oil said yesterday it would need 19 trillion won ($16 billion) by 2012 for its overseas asset acquisitions. Chinese companies have spent at least $12.6 billion on oil assets overseas since December, including purchases in Singapore, Syria and Kazakhstan. China Petrochemical Corp., parent of Asia’s largest oil refiner, agreed in June to buy Addax for C$8.3 billion ($7.7 billion).

Korea, China and India are looking to secure energy supplies after crude oil fell from an all-time high last year, making assets cheaper. Oil futures in New York have advanced 60 percent this year on signs the worst of the global recession has passed. Prices are still 51 percent below the record $147.27 a barrel reached in July 2008.

Korea National Oil plans to increase its crude oil stockpiles to 141 million barrels by 2013 from 121 million barrels as of the end of August, the company said yesterday.

Tags:  Addax, Korea Oil, oil company