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Saturday, June 02, 2007

KNOC eyes 10 billion barrel bonanza

south korea31 May 2007 - Upstream OnLine - South Korea's state-run producer Korea National Oil Corporation (KNOC) claimed today that the West Kamchatka Offshore block, which lies in the Sea of Okhotsk, could hold 10 billion barrels of oil - almost treble initial estimates. However, the South Korean government warned that it was too early to make any firm estimates. "The drilling hasn't started yet, but the estimated oil reserves are up to 10.3 billion barrels," a spokesman for KNOC told Reuters. With appraisal drilling due to begin only next year, the estimate appeared to be based on seismic surveys and initial studies conducted in 2005 and 2006. The standard Western practice is to put a figure on oil reserves only after appraisal drilling. The field is jointly controlled by South Korean players and Russian state-run oil company Rosneft. In December 2005, when South Korea sealed its investment, it said that the Russian government had estimated reserves there at about 3.7 billion barrels. The KNOC spokesman said the reserves estimate had been revised higher last November after another round of studies. An official with Seoul's Energy Ministry told Reuters it was premature to give any estimate. "It is highly risky to say 10 billion barrels as there is another stage of exploration still to come," said Kim Jae-Jun, who runs the country's overseas investment programmes at the South Korean Ministry of Commerce, Industry & Energy. Other shareholderes in the block are SK Corporation, Daewoo Inernational and Hyundai Corporation. Previously Rosneft had estimated reserves on the West Kamchatka shelf at around 6 billion barrels.

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