London independent inks 20-year pact to assist North Korea

By OGJ editors
HOUSTON, Sept. 29 -- Aminex PLC, London independent, signed a 20-year petroleum agreement with the North Korea government to assist in developing the petroleum industry.

Aminex initially will provide technical assistance to the country by assessing existing data, obtaining new data, assisting with drawing up a framework for licensing exploration areas, and for marketing the country's potential to the international oil industry.

In return, Aminex will receive a royalty on hydrocarbons produced from new drilling anywhere in the country, onshore or offshore, and be entitled to a carried working interest in any wells drilled by incoming companies.

Aminex will also have a prior right to explore in its own name, either alone or with international industry partners, anywhere in the territory covered by the agreement.

The agreement represents only limited financial exposure for Aminex at this stage with the option to expand the operation through exploration and development drilling under appropriate circumstances, said Brian Hall, Aminex chief executive.

North Korea has an existing petroleum industry, and several wells have been drilled onshore and offshore the last 25 years. These resulted in limited discoveries of oil. Aminex believes that the country is highly prospective for new discoveries but lack of resources has so far restricted progress (see map, OGJ, Jan. 4, 1999, p. 62).

Aminex and DPRK signed the agreement June 30 in Pyongyang, subject to certain closing conditions since fulfilled. Aminex has been reviewing North Korea for several years and first visited the country in 2001, Hall said.

"At present relations between North Korea and the outside world are strained but the important relationship with South Korea appears to be improving and commercial cooperation is on the increase. An expanding energy industry may possibly help to build bridges between DPRK and the outside world."