SK buys stake in Vietnam offshore oil field

SK Corp. said yesterday it bought a 25 percent stake in an offshore oil development project in Vietnam to better tap the fast-growing energy demand in Southeast Asia.

Korea's largest refinery took over the shares in the 15-1/05 oil field from Vietnam Oil and Gas Corp., or Petrovietnam, the Southeast Asian country's state-run oil monopoly.

The purchase is SK's second energy investment in Vietnam.

The company currently holds a 9 percent stake in the neighboring 15-1 reserve, which has secured about 300 million barrels of crude oil and over 3 trillion cubic feet of gas.

"We had a great success in 15-1 field, and we pin a high hope on the new project as well," SK CEO Shin Heon-cheol said in a signing ceremony in Hanoi.

SK also plans to set up a branch in Hanoi in a further effort to expand its overseas exploration businesses. SK is currently tapping 25 oil fields across 14 countries, having secured about 440 million barrels of oil reserves so far.

The Seoul-based oil firm estimates its crude oil development project in Brazil will start production in the second-half of 2007.

SK's oil development business turned in about 215 billion won ($228 million) in operating income last year, which accounted for nearly 20 percent of total earnings.

Industry watchers largely expect the company's revenue from exploration projects to further rise in the coming years on the back of high petroleum prices.