Korea’s LG International (LGI) is growing its presence in Latin America through a new partnership in Colombia with London-listed GeoPark Holdings.

GeoPark confirmed on Tuesday that LGI had acquired a 20% stake in its Colombian subsidiary, GeoPark Colombia SA, whose assets in the country includes interests in 10 hydrocarbon blocks.

The deal comes just four days after GeoPark’s announcement that it was flowing oil from the onshore Tua oilfield – one of two discoveries made on the Llanos 34 Block in Colombia this year.

Under the agreement, LGI will be required to pay $20.1 million in cash for its proportion of the purchase price of the Colombian assets, which were acquired by GeoPark in February and March of this year.

The cash payment also accounts for working capital, the reimbursement of transaction expenses, the contribution of net additional capital invested by GeoPark into the Colombian business during this year and pro-rata assumption of existing debt, plus any future investment obligations.

The transaction includes an incremental equity provision whereby GeoPark is entitled to earn back up to 12% interest in its subsidiary, depending on the success of the Colombian operations.

LGI and GeoPark have been allied in South America since 2010, holding joint projects in Chile. GeoPark said on Tuesday that the pair also planned to build a portfolio of upstream oil and gas assets throughout the continent, currently targeting new project acquisitions in Chile and Colombia, as well as in Brazil, Peru and Argentina.

GeoPark chief executive James F Park said in a statement that the company’s alliance with LGI was a key element of its current expansion and success in Latin America.

“We are … pleased to have LGI reaffirm their trust in GeoPark by extending our strategic alliance to 2015 and joining our efforts to build a high-potential risk-balanced portfolio of upstream oil and gas assets across Latin America – a region with immense hydrocarbon opportunity,” Park said.

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