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South Korea's KNOC May Buy 1-2 Oil Fields Next Year

SEOUL, Dec 26, 2006 (Dow Jones Newswires)

State-owned Korea National Oil Corp. is seeking to buy one or two oil fields next year, possibly in the Caspian Sea region, a top KNOC official said Friday. Caspian Sea is bordered by Russia, Azerbaijan, Iran, Kazakhstan, and Turkmenistan.

To help South Korea meet 18% of its annual oil and gas needs in 2013 from overseas fields that it already owns or has jointly developed, KNOC will consider acquiring stakes in foreign oil companies, said Kim.

By contrast, in 2005, oil and gas from overseas assets met only 4.1% of the country's energy requirements.

Kim said the oil companies that KNOC is interested in should be small, independent companies and not major companies such as BP Plc (BP), Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) and TotalElfFina, which will necessarily involve much bigger price tags.

Given recent geopolitical volatility in the Middle East and soaring international oil prices, South Korea, like China and India, is seeking to diversify its energy sources. In particularly, it is looking to bolster its energy security by tapping into resources that it owns or intends to acquire overseas.