OilVoice - LG International And Geopark Enter Latin American Strategic Partnership

LG International And Geopark Enter Latin American Strategic Partnership

Friday, March 12, 2010

LG International Corporation ('LGI'), the Korean conglomerate, and GeoPark Holdings Limited ('GeoPark'), the Latin American oil and gas explorer and producer, announce the formation of a new strategic partnership to jointly acquire and develop upstream oil and gas projects in Latin America.

LGI is the energy, natural resource and trading affiliate of LG Corporation, the large international Korean company with 147 subsidiaries operating in over 50 countries and with annual sales exceeding US$100 billion. LGI has successfully invested and operated in the oil and gas exploration and production business for over twenty years including current upstream oil and gas projects in Oman, Vietnam and Kazakhstan. LGI has adopted a long term strategy of investing in oil and gas upstream assets in emerging resource-rich countries and has targeted Latin America as a new growth region.

GeoPark is an experienced Latin American oil and gas operator with producing properties in Chile and Argentina. GeoPark is the first and only private oil and gas producer in Chile, where it has established a successful track record of finding and producing oil and gas reserves.

The objective of the LGI-GeoPark strategic growth partnership is to build a risk-balanced portfolio of upstream opportunities across Latin America - a rich under-explored hydrocarbon region whose economic future is dependent on the development of secure energy supplies. The intent is to leverage the platform and experience of both partners to identify and carry out side-by-side acquisitions; initially targeting upstream projects in the US$100-500 million range size.

GeoPark will be the manager of the strategic partnership and Operator of acquired projects. GeoPark will have the right to earn additional equity interests in each project, in addition to its working interest, in accordance with a formula based upon the financial performance of each acquired project. The initial term of the partnership is three years and the target for closing the first acquisition is during 2010.

Commenting, Dr. E. K. Lee, Vice President, Head of the Oil and Gas Business Division of LGI, said:
"We are pleased to embark on this important initiative to expand into and invest in the Latin American upstream oil and gas business. We believe this region represents an area of untapped opportunities and high potential that fits our long term strategic objective of building a global energy business. This project will also lay the foundation to promote the development of related businesses in the future. We are pleased to enter into this partnership with GeoPark - an entrepreneurial company with proven competence in the acquisition and management of oil and gas projects. It represents a partnership of complementary strengths and we look forward to growing together with GeoPark in Latin America."

Commenting, Gerald E. O'Shaughnessy, Chairman of GeoPark, said:
"LG is one of the world's great industrial enterprises - and we are proud to be partnering with them on this important initiative, which represents a new phase in our Company's development. Following our consistent success in Chile, it has been GeoPark's intention to expand into new projects in Latin America. By combining our efforts with the strategic aim and financial and technical muscle of LGI, we will be able to accelerate this expansion, as well as target larger and more attractive projects. Strategic long term partnerships have been a key element of GeoPark's business plan and development to date and we see this alignment and partnership with LGI as the underpinning for our next stage of growth."