SEOUL, July 24 (WAM) --Hwang Doo-yul, CEO of state-runKorea National Oil Corp. (KNOC), and Geoff Waterman, vice president of Newmont Mining of Canada, signed a deal Monday tobuy a 100 percent stake in an oil sands mine in Canada that canproduce 250 million barrels of oil, the Ministry of Commerce,Industry and Energy said Monday.
It said the estimated size of the Blackgold Mine in the ColdLake region of Alberta will allow South Korea to extract 30,000-35,000 barrels of oil per day for the next 25 years.
The South Korean firm is expected to begin production in 2008,with full-scale operations to commence two years later. The KNOCpaid US$270 million for the mining rights and expects annualsales to reach $500 million once full-scale production commences. Oil sands, also referred to as tar or bituminous sands, are depositsof bitmen trapped in a mixture of clay, sand and water. Theyare in essence sand or sandstone containing at least 10 percentpetroleum.There are estimated to be 175 billion barrels of petroleum thatcan be extracted from oil sands mines around the world, withCanada having the world's second-largest reserve of oil sandsafter Venezuela.
Canada, which has most of its oil sands mines in the Peace River,Cold Lake and Athabasca regions of Alberta, can churn out 4.7billion barrels of oil on a annual basis.
The ministry said once production begins, the country's oil outputself-sufficiency level could be raised by around 1.2 percent.
South Korea currently produces 115,000 barrels of oil daily fromlocal and overseas oil fields.
Seoul wants to raise the self-sufficiency level from around 4percent at present to 18 percent in 2013.
Officials at the Energy Ministry said talks had been startedby the KNOC in April, and most details of the purchase were agreed upon before the end of June.
WAMBI-SA
