GS Energy, an energy business arm of GS Group, joined a bid to secure a stake in the Abu Dhabi Company for Onshore Oil Operations, which operates 15 oil fields in the United Arab Emirates, to expand its crude oil production business in January, the company said in a recent filing to financial authorities.
“GS Energy is seeking to buy a 5 percent stake in ADCO, which is estimated at 1.25 trillion won ($1.11 billion),” industry sources said.
“When GS Energy wins the deal this month, it will secure 40-year operating rights, together with the stake, which will offer the firm a long-term stable income source.”
The oil fields in Abu Dhabi produce 1.6 million barrels per day and are expected to reach 1.8 million barrels per day from 2017.
ADCO has pushed for the bid to sell its 40 percent stake to international bidders for the past few years.
So far, global energy giants such as BP, Royal Dutch Shell and PetroChina have joined the bid.
Among Korean players, GS Energy and Korea National Oil Corporation had expressed their interest in the bid, but only GS Energy submitted the proposal. However, observers say KNOC may seek a stake in ADCO by jointly financing the deal once GS Energy wins the bid.
The ADCO deal will also affect the ranks of oil exploration and production business players.
When GS Energy secures a 5 percent stake in ADCO, the company’s daily crude oil production capacity will jump to 90,000 barrels, surpassing the 77,000 barrels via overseas oil fields by SK Innovation, the nation’s top crude oil producer.
“Besides ADCO, GS Energy will continue to invest in overseas oil fields to secure stable oil supply channels for its local businesses and to accumulate technological experiences and management know-how for oil exploration and production overseas,” a company official said.
By Seo Jee-yeon (jyseo@heraldcorp.com)
