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KNOC's purchase of Dana Petroleum begins to pay off

All Headlines 11:00 November 18, 2013

By Byun Duk-kun

AMSTERDAM, Nov. 18 (Yonhap) -- The South Korean state oil company's acquisition of a British oil company is beginning to pay off in more than just one way, including a significant improvement to South Korea's energy self-reliance, company officials here said Monday.

It has been only about three years since the Korea National Oil Corp. (KNOC) purchased Dana Petroleum plc in what many labeled as one of the most successful hostile takeovers in history at the time. Since then, Dana's oil production has already jumped 25 percent from 44,000 barrels per day to 55,000 barrels per day, according to Baek Oh-kyeu, KNOC's chief strategy officer at Dana.

Dana's oil production alone already makes up nearly one fourth of the KNOC's total oil production of about 240,000 barrels per day, he said.

Dana seeks to nearly double its oil production to 100,000 barrels by 2016.

Such an ambitious plan comes as the company has secured an additional 53.4 million barrels of oil in confirmed reserves since the KNOC's takeover, boosting the total amount of confirmed reserves to some 211 million barrels, according to Baek, who works at Dana's headquarters in Aberdeen, Scotland.

Dana's existing assets in the Netherlands, including two offshore platforms, are currently producing some 11,000 barrels of oil per day, but Dana's ongoing exploration projects are expected to help boost the company's daily production to about 50,000 barrels per day in the North Sea area alone by the end of 2015, he said.

KNOC's growing production of oil in Dana-held oil fields is also improving South Korea's energy self-reliance.

A shipment of oil, including quantities produced by Dana, is expected to arrive in South Korea before the end of the year, marking the first time that oil produced overseas by the KNOC or its subsidiary will be shipped directly to the country, Baek said.

In addition to helping the country's overall energy security, the acquisition of Dana is also proving to be lucrative for the KNOC.

Dana's total assets have jumped over 55 percent from about US$2.98 billion at the end of 2010 to over $4.67 billion as of the end of last year while its debts grew 45 percent from some $1.72 billion to $2.49 billion over the cited period, according to the KNOC.

Also, the KNOC has already retrieved $200 million in two separate payments in dividends in 2011 and 2012 from Dana as the Aberdeen-based company posted a net profit of $293 million and $174 million, respectively, in those years.


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