Korea National Oil Corp., the state-run oil company of South Korea, acquired Kazakhstan-based Sumbe for $335 million in an effort to bolster South Korea's energy reserves. Korea National already has four oil projects in Kazakhstan and views the country as an integral part of its Central Asia operations.
Earlier this year, Korea National acquired Harvest Energy Trust, a Canadian royalty trust, for $4 billion. That acquisition will nearly double Korea National's daily output of 70,000 barrels. Korea National will continue to acquire foreign oil assets in 2010 toward reaching its crude oil output goal of 300,000 barrels a day by 2012, according to the Wall Street Journal.
Sumbe owns oil blocks in Arystan and Kulzhan. Korea National will control 85% of the venture and an unidentified Kazakh partner will control the remaining 15%. The Arystan oil field has proven reserves of 5 million barrels and probable reserves of 57.8 million barrels, according to the Journal. Korea National expects production there to rise to 10,000 barrels a day in 2012 and double from there by 2014.
China's Sinochem was believed to be interested in acquiring Sumbe for $320 million, according to press reports. Korea National previously fell short in an acquisition bid for Swiss firm Addax Petroleum earlier this year.