The state-run Korea Gas Corp. (KOGAS) plans to enter into the new businesses of exploration, production and sales of crude oil, mainly targeting Iraq.
It confirmed the inclusion of the crude oil businesses in the revision of its articles of association at Thursday’s board of directors’ meeting, the Ministry of Knowledge Economy said.
Under the decision, KOGAS will officially register as an oil developer if the plan is approved at an annual shareholders’ meeting, scheduled for March 29.
The new direction is aimed at giving the company more leeway in its latest oil project in the Middle East country, KOGAS said.
It is currently participating in a development contract signed earlier this year for the 4 billion-barrel Zubair oil field, as part of an international consortium led by Italy’s energy giant Eni.
The Zubair deal is expected to make war-torn Iraq a top oil producer through a series of rehabilitation projects, with an output capacity of 12 million barrels per day.
Partnered with Russia’s Gazprom, KOGAS is also involved in another Iraqi project to explore the Badra oil field, which holds reserves of 2.4 billion barrels.
“Our Iraq projects require us to do this,” a KOGAS spokesman said. “Business objectives of KOGAS should include oil missions so we can carry out our job in Zubair and Badrah.”
KOGAS is leading South Korean bids for Baghdad-led oil exploration projects, as another state-run energy firm, Korea Oil Corp., is blocked from tenders by the central government due to its engagement in projects in the autonomous Kurdistan region.
Iraq, which has the world’s third-richest reserves of oil, is taking a growing significance in the South Korean industries.
South Korea, the world’s fifth-largest oil importer, is seeking to gain more resource production assets for its future energy needs.
A recent series of overseas projects raised forecasts in the industry that the company is set to plunge into the oil business on a bigger scale.
This year, KOGAS plans to invest $1.5 billion in the Badra project, and also secure more exploration rights in the 15 eastern and western oil fields in Baghdad-led bids.
Earlier this year, KOGAS expanded its resource-related departments in an organization reshuffle and newly established a unit specializing in Iraqi projects.
Another major target in the gas firm’s oil businesses will be Russia. Last month, CEO Choo Kang-soo visited the Sakha Republic for an agreement on cooperation on the gas projects in the Yakutia region, but it’s also expected to lead to participation in oil field exploration as well.
KOGAS is currently participating in oil-and-gas projects in Nigeria, Iran and Mexico.