Korea strikes major oil deal with Abu Dhabi

Breaking News:Korean National Oil Corporation signs agreement with Abu Dhabi to develop oil fields.

South Korea has signed its first oil deals with Abu Dhabi, strengthening ties between the emirate and one of its biggest oil customers.

The South Korean president Lee Myung-bak said the state-owned Korean National Oil Corporation(CK) (KNOC) had signed an "unprecedented" memorandum of understanding today (Sun) on oilfield development following summit talks in Abu Dhabi.

KNOC would take a stake in an oil concession with reserves of at least 1 billion barrels, he said.

The oil deal, if finalised next year as Mr Lee expects, would be the largest ever for South Korea, which lacks domestic crude production.

"South Korea has become able to participate in large oil production projects worth over at least 1 billion barrels by the size of oil reserves that can be exploited," he told reporters in the UAE capital.

Mr Lee said KNOC had signed a separate deal to participate in developing three untapped Abu Dhabi oilfields with an estimated 200 million barrels of combined reserves.

Both deals were signed by the heads of KNOC and Abu Dhabi National Oil Company(CK). Sheikh Khalifa Bin Zayed, the President of the UAE and Ruler of Abu Dhabi, Sheikh Mohammed Bin Zayed, the Crown Prince of Abu Dhabi, and Mr Lee were in attendance.