Aminex signs landmark deal with North Korea

Irish exploration group Aminex has signed a landmark deal with the North Korean government to help develop its petroleum industry.

The 20-year agreement will give the AIM-listed group royalties on any oil or gas produced in North Korea or its offshore assets.

Aminex has also secured the right to explore anywhere in the country covered by the agreement. The Irish-registered company signed the accord in June but only announced it yesterday.

The exploration group will initially provide the secretive communist state with technical assistance in assessing data and drawing up a framework for licensing exploration areas. It will also advise the government on marketing North Korea's potential to the international oil industry.

Davy analyst Mr Job Langbroek said the deal was important for Aminex.

"This is a country that does not let anyone in, so the fact that Aminex has managed to get a foothold is important," he said.

Aminex chief executive Mr Brian Hall said the agreement was the culmination of a long-term effort by the company. Aminex officials first visited North Korea in 2001.

"Relations between North Korea and the outside world are strained but the important relationship with South Korea appears to be improving and commercial co-operation is on the increase," said Mr Hall.

The deal is seen as beneficial to Aminex on several fronts. First, it requires limited financial exposure with strong potential returns. It also diversifies the company's exploration interests, which have been concentrated in Tanzania.

It is unclear how much oil and gas is in North Korea. Previous licensees have allowed their interest to lapse. However, there are hopes of finding oil and gas offshore close to Chinese reserves.