Korea National Oil Corp. (KNOC) decided to sell its stake in Kazakhstan’s Zhambyl oil block for $5 million, despite its investment of $250 million starting from 2008.
During the Lee Myung-bak administration, this project was touted as one of successful overseas resource development projects.
However, KNOC gave up the project after making a loss of $245 million over the past eight years.
Although there are some who complain that the state-run company wasted the taxpayers’ precious money by failing to thoroughly review the feasibility of the project, others point out that KNOC is selling its stake at a bargain price due to the increasing pressure from the current administration to withdraw from the project.
According to government and industry sources on August 4, KNOC recently held a board of directors’meeting and decided to sell its stake in the Zhambyl oil block to Kazakhstan’s state-run oil company KMG. The sales price is tentatively set at $5 million.
KNOC acquired a 27 percent s take in the Zhambyl oil bock for $85 million from KMG in 2008 and made an additional investment of $165 million in the project.
KNOC officials said, “We are near agreement with the Kazakhstan government over the disposal of our stake in the Zhambyl oil block.”
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