KOGAS to cut stake in Iraq gas field as violence rises

SEOUL: Korea Gas Corp. (KOGAS) plans gradually to reduce its stake in Iraq’s Akkas gas field, which lies in Anbar near the Syrian border, as violence rises in the province.
Iraq’s top energy official said last week that spillover attacks from the civil war in Syria were hindering development of Iraq’s gas and oil reserves in the region.
KOGAS told South Korea’s stock exchange in a filing of its intention to sell part of its share in a project to develop the gas field — Iraq’s largest, with reserves of 5.6 trillion cubic feet — in 2015 or later to pay off debt.
Thecompany did not say how large a stake it wanted to sell, but added that no sale process had yet started. It gave no further details.
Militants have been regaining ground in Iraq, particularly in the western province of Anbar where they overran two cities on Jan. 1.
A week later, a spokesman for KOGAS, the world’s top corporate buyer of liquefied natural gas, told Reuters the regional strife was having no impact on the company’s operations.
More than 1,000 people have been killed across Iraq since then, building on a trend of intensifying violence that made last year the country’s bloodiest since 2008, when sectarian warfare began to abate from its height.
For KOGAS, commercial factors are also at play.
South Korea’s state-run energy companies face heavy pressure from a new government to shed assets and pay off debt by 2017.
All three have submitted asset-disposal plans to the government and await approval, company sources have said.
A KOGAS source on Thursday confirmed a media report that the firm was considering selling 49 percent of its fully controlled project at the Akkas field for 309 billion Korean won ($286 million).
It intends to retain operating control of the project, which it secured in 2011.
Baghdad has sent extra troops to the Akkas area, specifically to protect operations.
KOGAS has signed contracts for surface installations and invested hundreds of millions of dollars in pipelines.