[Exclusive] Korea National Oil Corporation Pursues Acquisition of Australian Offshore Oil Field... Reserves of 150 Million Barrels

Petroleum Corporation Reviews Acquisition of Australian Oil Fields Comprising Six Blocks
Only One Block Explored...Estimated Reserves of 150 Million Barrels
Capital Erosion Leads to Overseas Asset Sales...Sharp Decline in Oil Production
Oil Field Development Budget Also Decreasing...Concerns Over Resource Security Gap

The Australian 'Dorado' offshore block that Korea National Oil Corporation is considering acquiring.
[Photo by Carnarvon Energy website capture]

[Asia Economy Sejong=Reporter Lee Jun-hyung] Korea National Oil Corporation (KNOC) has begun reviewing the acquisition of an Australian offshore oil field consisting of six blocks. The proven reserves of one block where exploration has been completed are estimated at 150 million barrels, and it is expected that this block alone can produce 100,000 barrels of crude oil per day. KNOC plans to finalize the acquisition decision after conducting a detailed technical evaluation of the oil field.

According to data submitted by KNOC to the office of National Assembly member Han Mu-kyung of the People Power Party on the 15th, KNOC started the acquisition process for the Australian offshore oil field in July. Recently, KNOC signed non-disclosure agreements (NDAs) with two Australian resource development companies holding stakes in the oil field, 3D Oil and Carnarvon Energy, and is reviewing the profitability of the blocks. A KNOC official stated, "We plan to decide whether to proceed with the project after conducting a detailed technical evaluation," adding, "The scale of the stake to be acquired has not yet been determined."

The oil field KNOC is pursuing for acquisition is located in six blocks in the Roebuck Basin offshore northwest Australia. Among these, one block is the Dorado block, which has completed exploration and has entered the development phase for full-scale drilling. The estimated reserves of this block are about 150 million barrels. Once development is complete, it is expected to produce 75,000 to 100,000 barrels of crude oil per day. The remaining five blocks are in the exploration phase, and specific crude oil and gas reserves have not yet been confirmed.

The reason KNOC is eyeing the Australian offshore oil field is simple. Since 2020, its financial structure has fallen into a state of complete capital erosion, and as it has been selling overseas assets one after another to improve this, its own crude oil production volume has shrunk. In fact, KNOC’s daily crude oil production volume decreased by about 41%, from 237,000 boed (barrels of oil equivalent per day) in 2015 to 136,400 boed last year. KNOC expects daily crude oil production to decline from 132,000 boed this year to 127,000 boed by 2026.

KNOC holds the position that government financial support is necessary from the perspective of resource security. This is based on the judgment that a vicious cycle of "investment contraction → production decrease → operating profit decline → deterioration of financial structure" has become entrenched during the process of implementing self-help measures such as selling overseas assets to overcome capital erosion.

Investment budgets for overseas oil field development are also declining. KNOC plans to reduce its overseas resource development investment from 673.5 billion KRW this year to 379.1 billion KRW in 2026, a decrease of about 44%. While major countries are weaponizing energy resources such as crude oil and gas, KNOC’s overseas resource development investment is actually shrinking. Another KNOC official said, "Due to the high risks and entry barriers in oil field development, private companies are withdrawing from or downsizing related businesses," adding, "It is necessary for public enterprises to restore the oil field development ecosystem through leading investments."

This content was produced with the assistance of AI translation services.