GeoPark oil and gas company with operations in Latin America announced in a joint release the definitive sale of oil and gas exploration and production blocks in the south of Chile to the Korean conglomerate LG International Corporation.
The deal involves the sale of a 10% stake in the Fell block oil field in south Chile for 70 million US dollars.
The deal is LG International first oil development business in Latin America and it is the first time that a Korean company has secured an oil block in Chile, the firm said.
Under the deal, LG will join in developing the Fell block and two other oil fields in the exploration stage -- the Tranquilo and Otway blocks. The Fell Block has been producing 7,000 barrels of petroleum and gas per day since 2006.
We forged a strategic partnership with GeoPark in March last year and agreed to jointly acquire Latin American oil fields, LG said. We plan to expand resources development projects in the region.
LGI is the energy, natural resource and trading affiliate of LG Corporation, the large international Korean company with 147 subsidiaries operating in over 50 countries and with annual sales exceeding 100 billion US dollars.
LGI has successfully invested and operated in the oil and gas exploration and production business for over twenty years including current upstream oil and gas projects in Oman, Vietnam and Kazakhstan.
LGI has adopted a long term strategy of investing in oil and gas upstream investments in emerging resource-rich countries and has targeted Latin America as a new growth region in accordance with its strategic partnership with GeoPark.
Commenting on Monday’s announcement, Dr. E. K. Lee, Vice President and Head of the Oil and Gas Business Division of LGI, said: We are very pleased to acquire an interest in GeoPark’s upstream platform which represents an attractive foundation for our future growth in Latin America and the first oil and gas investment by a Korean company in Chile.
We believe this region represents an area of untapped opportunities and high potential that fits our long term strategic objective of growing a global energy business. Our partnership with GeoPark is a relationship of complementary strengths and we see the GeoPark team and its properties as a key first step in building our business in Latin America. We look forward to growing together with GeoPark.
James F. Park, Chief Executive Officer for GeoPark, said the company was pleased “to close the deal and views its strategic partnership with LGI as a key element of our future growth and expansion in Latin America. The opportunity to cement this relationship by an initial sharing of projects builds a solid base for a promising long term and committed acquisition partnership. It also clearly demonstrates the value of the business that GeoPark has developed since 2006.
Last year GeoPark announced an investment program extending to 2015 involving 300 million US dollars in the Fell block. The company which has offices in London currently has 30 wells in production with a daily output of 1.600 barrels of oil and a million cubic metres of natural gas per day.