S.Korea's SK Corp to develop Madagascar oil block http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=CN&storyID=2006-06-15T070424Z_01_SEO201801_RTRIDST_0_ENERGY-KOREA-MADAGASCAR.XML&rpc=66
Thu Jun 15, 2006 3:04am ET
SEOUL, June 15 (Reuters) - SK Corp. (003600.KS: Quote, Profile, Research), South Korea's top oil refiner, said on Thursday it had acquired a 20 percent interest in a deep-water exploration block in Madagascar, as it seeks to diversify its energy sources.
SK, which controls nearly a third of South Korea's oil market, said in a filing to the stock exchange the exploration will be conducted in partnership with ExxonMobil (XOM.N: Quote, Profile, Research) and BG International (BG.L: Quote, Profile, Research).
The Majunga block, which covers an area of approximately 15,840 square km (6,116 sq mile), is located in deep water in northwestern Madagascar, the world's fourth-largest island.
The acquisition in the Majunga Offshore Profond exploration block is under a farm-out agreement with Vanco Madagascar Limited, a unit of Vanco Energy, a U.S.-based oil exploration firm, SK said in a statement. It said the drilling of an exploration well was planned for early 2007.
The exploration will be conducted in a 50 percent partnership with ExxonMobil, the world's largest publicly traded oil company, and a 30-percent partnership with BG, in which ExxonMobil is the operator.
South Korea, which imports all of its oil and is the world's fourth-biggest crude oil buyer, is trying to secure energy sources to fuel its export-driven economy.
On Monday, SK announced it had acquired exploration and development interests in four blocks in the U.K. North Sea, its first entry into the European exploration and production business.
SK said it would develop the four blocks with equity interests ranging from 30 percent to 40 percent in a deal with U.K.-based Nautical Petroleum (NPE.L: Quote, Profile, Research), a specialised developer of heavy oil assets.
Including the Madagascar deal, SK has exploration and development operations in 13 countries in Africa, Asia and the Americas.
Madagascar has become an exploration hot spot in recent years as several oil majors have either acquired or are negotiating concessions, mostly in offshore blocks off its northwestern coast.
But while these remain in the exploration phase, government officials say there are bitumous ores onshore in the southwest that they plan to start tapping in the next few years.
With oil prices hovering over $70 a barrel, experts think Madagascar is in a position to profit from bituminous ores, even though the investment required to extract it will run to hundreds of millions of dollars.
Last year, ExxonMobil boosted its presence in Madagascar by taking a 70 percent interest in 87,000 kms off the northwestern coast.
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