Facing Yao Yuan again, Kim Jae Hyun no longer had the sense of superiority he had before.
The predecessor of Oriental Petroleum was Oriental Oilfield Services Company, which was a company specializing in providing oil field exploration and production services. In fact, Oriental Oilfield Services was an empty shell at that time. The exploration team, drilling team and related equipment were leased from the Petroleum Corporation.
Later, I slowly built my own team. Most of the technicians and workers were from the Petroleum Corporation.
After racing for exploration, Dongfang Oilfield obtained the exploration and production rights of the second largest oil field in the Tyumen oil region. However, Dongfang Oilfield did not want it and sold it to Hyundai Petroleum. It received a huge sum of cash and entered a stage of rapid development.
.
Because China and South Korea were negotiating to establish diplomatic relations at the time, Hyundai Petroleum was able to win because it used LNG ship technology as a condition.
Kim Jae-hyun was grateful to Yao Yuan, because at that time Dongfang Oilfield had more and better options, such as BP Company and Exxon Mobil Company.
After the pleasantries, Kim Jae-hyun made his request straight to the point, saying, "Mr. Yao, we hope to get a long-term oil contract and purchase 200 million tons of crude oil from Dongfang Petroleum within five years at the current price. I hope you can agree."
"This is impossible, whether it is CIF or FOB price. 200 million tons, Mr. Jin, you should know what this concept is." Yao Yuan shook his head and said.
The entire production of Sedan Oilfield in four years.
Of course, Kim Jae-hyun raised the price all over the place. After thinking about it, he said, "Mr. Yao, how much can we get?"
Crude oil prices were on a downward trend from 1994 to 1997, but this was a historical trajectory. The problem is that this trajectory has been changed because now there is an extremely high-yield Sedan oil field.
To put it bluntly, Yao Yuan can already influence the international crude oil price!
However, the overall downward trend will not change. Moreover, after the Asian economic crisis in 1997, global crude oil prices plummeted to US$15 per barrel. This general trend is difficult to change. At least Yao Yuan has not thought of a solution yet.
The most critical thing is that it is impossible for Yao Yuan to give Hyundai Petroleum 200 million tons of crude oil.
Yao Yuan said, "The current crude oil price is stable at around US$23. We can sell 20 million tons of crude oil to Modern Oil at an FOB price of US$23 per barrel for a period of five years."
"Too little, Mr. Yao, the annual output of Sedan Oil Field is 50 million tons, and you also have Baku Oil Field. You have 70 to 80 million tons every year." Kim Jaehyun said in a deep voice, "The price can be negotiated, but the quantity must be
To improve, I think, in the short term, only modern oil can bring about such large purchases."
This is true. Before the outbreak of the Asian economic crisis, South Korea was a rising economic star. It had a lot of foreign exchange that could not be spent, and its demand for petroleum energy was growing. Modern oil was in the Tyumen oil region.
The oil fields on the edge have just started production and can only produce a few million tons per year. The oil field mining services are provided by Dongfang Petroleum.
Yao Yuan said, "Sedan Oilfield must give priority to supplying our own petrochemical base. We need to reserve part of it and release part to the international crude oil market. Our production capacity is also very tight."
After thinking about it, Kim Jae-hyun said, "How about 50 million tons? Based on the current price as an FOB price, Hyundai Petroleum will provide 50 million tons of crude oil within five years, 10 million tons per year."
$8 billion long-term contract for five years.
Quite attractive.
Kim Jae-hyun did not haggle over the price, which shows that they are willing to pay any price to obtain a stable supply of oil. This is the case for South Korea and Japan.
Seeing Yao Yuan deep in thought, Kim Jaehyun became a little anxious.
There are several heads of companies waiting in line for the meeting, including many petrochemical companies, including Japanese petrochemical companies. The production capacity of Sedan Oilfield is on the table. Since it has been announced that it will stop increasing production, it will only be 50 million per year.
Tons.
It's first come first served, and the Koreans don't want the Japanese to get a piece of the pie.
"Mr. Yao, to tell you the truth, my visit this time was authorized by the government. We can consider sharing the core technology of LNG ships with the Chunfeng Academy of Sciences as an additional condition to promote this transaction." Kim Jaehyun said.
There are conditions.
Yao Yuan was stunned. It seemed that the Koreans had conquered the core technology of LNG ships. This was a great technological boost for the Shipbuilding Research Institute of the Chunfeng Academy of Sciences.
After thinking about it, Yao Yuan said, "The five-year contract is okay, but 50 million tons is too much. In this case, I hope there will be a certain premium. How about adding 20 cents per barrel?"
That's a premium of $70 million.
Jin Jaehyun was stunned for a moment and said, "Mr. Yao, I need to ask for instructions."
Yao Yuan made a gesture of invitation.
Kim Jaehyun walked aside and took out his satellite phone and made a call for more than ten minutes. After he came back, he said, "Mr. Yao, five-year contract, 10 million tons per year, FOB price of US$23.2, deal done."
"It's a pleasure to cooperate." Yao Yuan happily shook hands with Kim Jae-hyun.
When the Asian financial crisis breaks out, Koreans may regret it.
The finalization of this deal ensures that Oriental Petroleum will earn at least US$3.2 billion in profits over the next five years, with an average annual profit of more than US$600 million.
For every barrel of oil sold, excluding costs and the UAE's share, Oriental Petroleum's profit is approximately US$9, which means that based on an annual output of 50 million tons, the annual profit is US$3.15 billion. Of course, this is based on the current crude oil price
To calculate, there are actually not that many.
Moreover, the Sedan Oilfield requires continuous investment in construction, but the construction funds of several hundred million US dollars are nothing.
Behind Kim Jae-hyun is the South Korean government, otherwise Hyundai Petroleum would not be able to do such a huge deal.
Afraid of a long night and many dreams, Kim Jae-hyun immediately called his team over to negotiate with Dongfang Petroleum on the details of the contract, hoping to sign it as soon as possible.
Koreans rushed to send money, and of course Yao Yuan welcomed them with both hands.
After Kim Jae-hyun left, Yao Yuan looked at the customer list and found a familiar name - Wang Xiang, Vice President of Formosa Plastics Group, the second generation head of Formosa Plastics Group.
Yao Yuan was a little puzzled and asked He Xueli to arrange for Wang Xiang to come in first.
As soon as Wang Xiang saw Yao Yuan, he strode forward to greet him, holding Yao Yuan's hand with both hands and shaking it enthusiastically, "Mr. Yao, congratulations. I learned that Dongfang Petroleum Sedan Oilfield drilled the world's first 100,000-ton well. I immediately rushed from Hawaii."
I came here and brought my father’s blessing.”
After changing their previous hostility, Yao Yuan and the Wang family had a tit-for-tat confrontation over the Haicang petrochemical base. It can be said that in the Wang family's view, the Haicang plan was sabotaged by Yao Yuan. They would only hate Yao Yuan and not talk about it.
Go to friends.
Now Wang Xiang was talking like a normal person, talking enthusiastically, and those who didn't know thought they had been good friends for many years.
"Thank you, Chairman Wang. Mr. Wang, please take a seat." Yao Yuan smiled and sat down.
Wang Xiang sat down and started chatting. The standard Chinese style of talking about business is to communicate feelings first and then talk about business. In this aspect, Yao Yuan prefers the way foreigners do, and the conversation is over.
, you don’t need so much foreshadowing.
"Mr. Wang, you came to me not just to say hello, but how can I help you?" Yao Yuan asked with a smile.
Wang Xiang smiled and said, "I want to buy some oil from Sedan Oilfield and hope to sign a long-term contract with Dongfang Petroleum."