Singaporean petroleum firm finds oil and gas reserves in DPRK

Nov 13, 2002 01:00 AM

Sovereign Ventures, a Singaporean petroleum exploration company, announced on August 28 that it found in the DPRK reserves of at least 28.3 bn cm of natural gas and 50 mm barrels of petroleum. The locations are in Hoeryong and Onsong in North Hamgyong Province.
The Singaporean venture stressed that the discovery is particularly significant since the survey covered only a third of the exploration zone with an area of 6,000 sq km. It acquired a 25-year concession from the DPRK’s oil development company in September 2001 and started its geophysical survey from April this year -- the first case in which a foreign business that has been given a concession in the country’s terrestrial part.

An agreement signed between the two companies stipulates that the 25-year-long project constitutes three stages:
1) geological surveys (first three years);
2) drillings (two years);
3) production (twenty years).
It also says that Sovereign Ventures shall retain 45 % of the total amount of resources produced, and the remaining 55 % shall be held by the DPRK.

According to the Singapore-based firm, it has signed an agreement with Sovereign Ventures Canada to extract the deposits, in which the latter will pay for all costs involving the exploitation of oil and gas reserves. The source also said that Sovereign Ventures Canada will undertake an extensive ground gravity and magnetic survey of the reserves and that Excel Geophysics in Canada will conduct a ground survey to gauge the extent of the reserves.
In addition to the Singaporean firm, four other foreign companies have been exploring for oil in three different places in North Korea, according to Seoul’s Korea National Oil Corp. They belong to Canada, Japan, Germany and Australia, all of which are involved in offshore operations, the source said on September 24.

The DPRK’s oil exploration history dates back to 1965 when it started its extensive geological research. And the country has been fully set on oil business since 1993 when its government upgraded the Petroleum Research Bureau to the Ministry of Petroleum Industry. In its report released in late 1997, the ministry, after 30 years of geological study and test borings in both offshore and onshore parts of the country, concluded that there exist seven oil-bearing basins. The report suggests that the West Sea Bay Basin alone contains billions of barrels of oil.
In October 1998, DPRK leader Kim Jong Il told the visiting South Korean business tycoon, the then honorary chairman Chung Joo Young of Hyundai Group (who died last year): “Pyongyang is on oil (basin).”

Source: The People's Korea
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