The state-run Korea National Oil Corporation and GS Energy have become the first South Korean companies to start oil production in the United Arab Emirates, together with the state-run Abu Dhabi National Oil Company.

On Tuesday, KNOC and GS Energy held a ceremony with ADNOC in Abu Dhabi to celebrate the commencement of commercial oil production in oil fields in Haliba, located in east Abu Dhabi. The event was attended by KNOC CEO Yang Su-yeong, GS Energy CEO Huh Yong-soo and ADNOC CEO Sultan Ahmed Al Jaber. 

In March 2012, the Korean consortium comprising KNOC and GS Energy signed an agreement with UAE to secure oil reserves in Haliba. The consortium began the exploration work in 2012, built production facilities in 2016 and started oil production last month.

ADNOC has a 60 percent stake in Haliba oil, whereas KNOC has a 30 percent stake and GS Energy has a 10 percent stake. Oil production will be carried out through a joint venture, Al Dhafra Petroleum. 

Under the agreement, the Korean side can extract 5.84 million barrels of oil per year, worth around $390 million. Over the next two decades until March 2042, Korea will be able to extract about 100 million barrels of oil, which is equivalent to the oil needed to operate 1 million vehicles for seven years.

UAE is the world’s eighth-largest oil-producing country, producing 3.8 million barrels per day as of 2018. The production of oil from Haliba is deemed to be the first tangible result since Korea and UAE elevated their bilateral relations and established a special strategic partnership in March 2018.

“The production of Haliba oil confirms the importance of cooperation between the two countries in the energy areas. ADNOC will continue to strengthen such strategic partnership in line with the nation’s 2030 strategy for smart growth,” said Ahmed Al Jaber, UAE Minister of State and ADNOC CEO. 

By Shin Ji-hye (shinjh@heraldcorp.com)