London firm says N.Korea oil exploration to start in a year

3rd June 2010, Comments 0 comments

The head of a London-based energy firm that signed a deal to search for oil off North Korea said Thursday he hoped to start exploring in a year but was closely monitoring tensions on the peninsula.

Aminex PLC executive chairman Brian Hall told AFP he expects "field work in about a year" off the communist nation's east coast and aimed to "find substantial reserves".

However, relations on the peninsula have become strained after North Korea was accused of sinking of a South Korean warship in March that left 46 sailors dead and stoked fears of an armed conflict.

Pyongyang has denied involvement in the sinking and threatened war in response to a trade suspension and other reprisals by the South.

Asked about the timing of the North Korea contract Hall said "we have been working with (the) North Koreans for over a decade and an agreement such as the one we have recently signed takes many months to negotiate".

He added: "Naturally we will keep a very close eye on the tensions on the peninsula, as we have done during previous incidents, but our project is of a long-term nature and well thought through."

Aminex announced last week that an associate company had signed a 10-year contract with North Korea to search for oil in an area of about 50,681 square kilometres (20,272 square miles) in the Korean East Sea. Hall declined to give an estimate of the potential deposits.

The contract was signed by Korex, a 50-50 venture between Aminex and Singapore-registered Chosun Energy.

The contract, signed at an unspecified date, was awarded by the Korean Oil Exploration Company, the North's state oil firm.

Aminex, with listings on the London and Irish stock exchanges, describes itself as an upstream oil and gas company with concessions in several countries including the United States, Kenya and Egypt.

According to a filing with Singapore's Accounting and Corporate Regulatory Authority obtained by AFP, Chosun Energy is an investment holding company with a paid-up capital of 1.2 million dollars.

It listed its address as the German Centre in Singapore, a building that hosts small and medium-sized foreign companies, and named three directors -- an American, one Briton and a Singaporean.

But staff at the German Centre told AFP the company had moved out.

Singapore is a major financial centre and corporate hub, attracting companies from all over the world because of the ease of doing business and access to funding.

North Korea, one of the world's most impoverished countries, is starved of energy and foreign exchange after decades of isolation as well as economic sanctions, but is believed by US officials to have up to six nuclear weapons.

South Korea's ban on most trade with North Korea in response to the ship sinking will cost the communist state hundreds of millions of dollars a year, according to figures from the Seoul-based Korea Development Institute.

Amid concerns of fresh provocations by North Korea, US President Barack Obama said Wednesday that he will work with Seoul to "deter aggression" and hold the North accountable for the attack on the Cheonan.

A nuclear-powered US aircraft carrier, the USS George Washington, will join a major anti-submarine naval exercise with South Korea next week in a show of defiance against North Korea, sources said Wednesday.

© 2010 AFP

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