SK Earthon Seeks Buyer for $140 Million Vietnam Oil Stakes

Core Insights - SK Earthon Co., a subsidiary of SK Innovation, is selling its stake in three offshore oil blocks in Vietnam to strengthen its financial position, with the assets valued at approximately 200 billion won (U.S. $140 million) [1][2] Group 1: Company Overview - SK Earthon has been operating in Vietnam since 1998, managing four offshore blocks in collaboration with Murphy Oil Corp. and PetroVietnam Exploration Production Corporation (PVEP) [2] - The company holds a 25% stake in the portfolio, while Murphy Oil and PVEP own 40% and 35%, respectively [2] - The sale does not include Block 15-1, which is SK Earthon's flagship asset and Vietnam's second-largest oil producer, having extracted over 400 million barrels by the end of 2023 [2] Group 2: Asset Details - The three blocks for sale include Block 15-2/17, currently in the exploration stage, estimated to contain over 170 million barrels of recoverable oil, equivalent to about 18% of South Korea's annual petroleum consumption [3] Group 3: Strategic Rationale - Analysts suggest that the divestment is a strategic move by SK Earthon to mitigate risks and recover capital amid rising costs and lengthy timelines in global resource development [4] - Exploration and production projects typically require substantial upfront investments, often in the hundreds of millions of dollars, and can take over a decade to generate returns [4] Group 4: Market Considerations - Industry officials warn that valuation and approval challenges may complicate the sale process, particularly for exploration-stage assets, which are harder to price compared to producing oil blocks [5] - The sale will also require consent from SK's joint venture partners, potentially slowing negotiations [5] - The sale process is being managed by SC Securities Co., with expectations of interest from regional energy investors and private equity funds [5]