The Korea National Oil Corp. will soon increase its presence in Kazakhstan under massive investment plans to significantly bolster its oil production, the company’s top official in the Central Asian country said.

The state-run KNOC has four production fields and four undergoing exploration in Kazakhstan that currently churn out about 15,000 barrels of oil per day.

“The company plans to increase its daily production level here to 50,000 barrels within the next few years, which will then make up a considerable amount of Kazakhstan’s total daily production of 1.5 million barrels,” Ryou Sang-soo, president of KNOC’s Kazakhstan branch, said in a recent interview with reporters.

Increasing production will be realized partly by adding a significant number of new oil wells at each of the existing fields, which means hundreds of millions, if not billions, of dollars in new investment, most of which will be funded by the KNOC’s existing assets in Kazakhstan.

“The Kazakhstan branch no longer receives any money from KNOC headquarters in Seoul as its key mines produce enough cash to fund their own operation and new investment,” Ryou said in his Almaty office.

One of KNOC’s most valuable assets, also the company’s most successful investment, is ADA Oil LLP, a joint venture in which the KNOC has a 40 percent stake. The company has an exploration field that currently produces about 3,500 barrels of oil per day in Kazakhstan’s western Aktobe Province.

Ryou said a new site at the ADA mine in Aktobe was showing “very positive” signs with the outcome of a complete study due later this month.

“The oil reserve at our fields is bound to shrink as we continue our production, and that is why we plan to add more exploration projects to our operations in Kazakhstan,” he said.

The KNOC also has a 9.45 percent stake in an exploration field, Zhambyl, in the Caspian Sea with an estimated reserve of 1.8 billion barrels. Ryou said daily production at Zhambyl will likely reach about 100,000 barrels, if the site is confirmed to hold such a large quantity of oil. This means that the KNOC’s near 10 percent stake in the project will entitle it to about 10,000 barrels of oil each day.

The KNOC may also purchase new fields or oil companies, possibly in Kazakhstan, as the company is working to increase its global daily production from the current 200,000 barrels to 300,000 barrels next year.

This, according to Ryou, means purchasing oil fields or companies that are already producing fossil fuel since increasing output of sites that hold potential requires identifying new reserves, as well as drilling new wells, which may take years.

“We have been told to keep an eye out for companies with a daily production of 50,000 to 100,000 barrels,” he said. 

(Yonhap News)