News // Oil and gas worldwide
Nigeria Cancelled South Korea Consortium Exploration Rights
30 January 2009 , 10:261244
"Nigeria informed our consortium that it will cancel the rights because the consortium failed to fully pay the investment that the group had agreed to honour in 2005 when the rights were awarded," consortium members Daewoo Shipbuilding and Korea Electric Power Corp said in a statement.
The consortium, led by state-run Korea National Oil Corp, paid $92 million in cash and offered a letter of credit to pay an additional $231 million to cover their 60 percent interest in oil blocks OPL321 and OPL323, they said. The blocks could hold as much as 1 billion barrels, according to preliminary estimates.
"The Korean consortium believes the decision is unfair and is seeking countermeasures including refunds," the members said.
South Korea, which imports all of its oil and is the world's fifth-largest crude buyer, signed the production sharing contracts with the Africa's top oil producer in March 2006 when South Korea's then president Roh Moo-hyun visited the country.
At the time, the South Korean consortium beat India's top energy explorer Oil and Natural Gas Corp in a hotly contested bid for the two highly prospective deep-water oil exploration rights in the Gulf of Guinea.
The cancellation of the rights by Nigeria, the world's eighth biggest crude exporter, is a set-back in South Korea's state-backed drive to increase its energy security by increase its oil reserve holdings six-fold.
The two oil fields oil are also 30 percent owned by British-listed firm Equator Exploration and 10 percent by a local Nigerian firm.
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