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Reports: Korea National Oil Joins Consortium To Buy El Paso Assets

3/20/2012 12:04 AM ET

Korea National Oil Corp. has joined a private-equity led consortium that has agreed to buy El Paso Corp.'s (EP: Quote) exploration and production business, according to media reports on Monday.

In late February, El Paso said it has agreed to sell its exploration and production EP Energy Corp. for about $7.15 billion to a consortium led by private equity firms Apollo Global Management LLC and Riverstone Holdings LLC. Korea National Oil's involvement in the buyout was not disclosed at that time.

The sale of EP Energy is part of a $21 billion merger deal between El Paso and Kinder Morgan Inc. (KMI: Quote) announced last October, when shortly thereafter Kinder Morgan revealed plans to sell El Paso's E&P assets.

El Paso had initially planned to separate itself into two public entities through a spinoff of its E&P business before the end of 2011. However, the agreement with Kinder Morgan did not necessitate that process.

Korea National Oil or KNOC, a state-run oil company, was established in 1979 after the two oil crisis of the 1970s to secure stable oil supply for South Korea. It carries out energy projects on behalf of the Korean government.

KNOC's reported participation in the buyout group for the El Paso assets comes as foreign companies are increasingly scouting for oil and gas assets in North America.

Japanese trading company Itochu Corp. is part of a consortium led by private equity giant Kohlberg Kravis Roberts & Co L.P. (KKR) that agreed in November 2011 to acquire Samson Investment Co., the largest privately held oil and gas firm in the U.S., for $7.2 billion.

Another Japanese trading company Marubeni Corp. (MARUY.PK) said in early 2012 that its U.S. unit has agreed to acquire a 35 percent working interest in the Eagle Ford shale oil and gas play from Dallas-based privately-owned independent oil and gas company Hunt Oil Co.

In November, KNOC joined a unit of Samsung Group to acquire Parallel Petroleum from Apollo for $771.5 million. Parallel operates oil and gas fields in Texas and New Mexico.

KNOC said in late February that its British subsidiary Dana Petroleum acquired a 28.3 percent stake in the Bittern offshore field from a U.S. company.

KNOC also holds a one-third interest in southwest Texas-based Maverick Basin assets operated by Anadarko Petroleum Corp. (APC).

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by RTT Staff Writer

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