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KNOC to import crude oil produced by its overseas unit

The state-run Korea National Oil Corp. said Thursday that it has successfully supplied crude oil produced by its own subsidiary from abroad to a top domestic refinery for the first time.

The crude, known as Forties, is the leading oil reserve in the North Sea region.

KNOC has sold 2 million barrels of such crude to GS Caltex, the nation’s oldest private oil refiner, through Dana Petroleum, its British subsidiary acquired in September 2010, where 300,000 barrels were directly produced by the subsidiary itself, according to the company.

Its significance lies in that the company has not only confirmed the effectiveness of overseas resources development, but also established an alternative and potentially stable line of crude in case of an unexpected oil crisis or perils regarding the supply and demand of oil in the Middle East, said KNOC officials.

It is also a measure to simply diversify the supply of crude in Korea, which at the moment relies heavily on the Middle East.

Up until now, legal restrictions from the producing country in addition to economic feasibilities have stalled such proceedings, but the recent increases in the official selling price from Middle East oil-producing countries ― reducing the overall price differential ― as well as the support from government policies, such as the Korea-EU FTA, have secured plausible incentives.

KNOC plans to actively market and pursue more of the same kind of direct crude supply to both British and domestic oil refiners in the future, the company stated.

By Kim Joo-hyun (
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Korea Herald daum