South Korea to buy Alberta oil sands field

Eric Watkins
Senior Correspondent

LOS ANGELES, July 24 -- South Korea has signed an agreement to buy a 100% stake in the Blackgold Mine oil sands field in the Cold Lake region of Alberta.

Hwang Doo-yul, chief executive officer of state-run Korea National Oil Corp. (KNOC), signed the deal with Geoff Waterman, vice-president of Newmont Mining of Canada, an affiliate of US-based Newmont Mining Corp.

KNOC is expected to begin production in 2008, with full-scale operations to start in 2010. KNOC reportedly paid $270 million for the mining rights and it expects sales to reach $500 million once full-scale production commences.

South Korea's Ministry of Commerce, Industry, and Energy said 30,000-35,000 b/d could be extracted from the field over the next 25 years. It said South Korea currently produces 115,000 b/d of oil from domestic and overseas oil fields.

The ministry said the country's oil output self-sufficiency level could be raised by around 1.2% once production begins. The South Korean government wants to raise the country's self-sufficiency level to 18% from the current 4% by 2013.

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