Gov't Bid to Tap Energy
Resources Abroad Pays Off

Korea's participation in the Aral gas field in Uzbekistan

Countries around the world have scrambled to develop or secure energy sources in the wake of a resurge of crude price hikes. Korea's participatory government has accelerated its bid to ensure energy security and cope with energy issues amid fierce global competition since its inauguration, Fortunately, the government's efforts to develop or secure energy sources through diverse diplomatic channels and collaboration as well as summit talks have begun to pay off.
As a result, Korea's own oil development surged from a paltry 2.8 percent of the nation's crude oil needs in 2002 to 4.1 percent in 2005, and the figure is forecast to climb up to around 10 percent in 2008.
Korea has turned to the Caspian Sea in Central Asia, which emerges as one of the world's largest gas and oil reserves together with the ones in the Middle East and Siberia.
The nation has been working hard to strategically beef up cooperation in the strategic energy and resources segment with Uzbekistan, one of the representative energy resources-rich countries in Central Asia.
Korea's efforts to tap the prospective gas and oil fields in Uzbekistan began when President Roh Moo-hyun made a visit to the Central Asian country last March, and in return, his counterpart Uzbekistan President Islam Karimov came to Korea last May to discuss on the development of the gas reserve field in Aral Sea.
Minister of Commerce, Industry and Energy Chung Sye-kyun visited Tashikent, Uzbekistan, on Aug. 30 and met with Uzbekistan leaders to conclude Korea's participation in the development of energy resources in Uzbekistan. MOCIE Minister Chung stressed the need for collaboration between Korea and Uzbekistan for combining Uzbekistan's rich energy resources and Korea's capital and technology. He met such Uzbekistan leaders as Deputy Prime Minister-Finance Minister Azimov, Economy Minister Hodjaev, and Azizov, president of the state-run Uzbekistan oil corporation, during his stay to the Central Asian country, the first of his overseas trip that included his stopovers in Kazakhstan, Greece, Romania and Finland between Aug. 30 and Sept. 10.
MOCIE Minister Chung's agreement with Uzbekistan leaders paved the way for Korea Resources Corp." participation in the development of the Jantaur uranium mining field with probable reserves of 26,000 tons.
In addition, Korea's state-run Korea National Oil Corp. (KNOC) inked a gas production sharing deal with Uzbekistan on Aug. 30, calling for KNOC's 20 percent stake in the development of the oil field in the Aral Sea. Russian, Malay, Chinese and Uzbek energy firms also participate in the project.
Under the deal, Korea's share is equivalent to 18 months of the country's average gas consumption.
The field whose actual production is to begin in 2012, is estimated to have about 8 trillion cubic feet of gas. The Central Asian country ranks 11th in terms of known natural gas reserves in the world.
Korea's participation in the Aral gas field is the nation's first such project in Uzbekistan and the second one in Central Asia following the one in Kazakhstan. The Aral gas field project is a representative case in which the participatory government's diplomatic efforts to secure energy sources have paid off.
Earlier, KNOC submitted a proposal on a stake sharing agreement on the Inam gas field to Azerbaijan's state-run SOCAR during the first Korean-Azerbaijan energy resources cooperation committee meeting in Baku, Azerbaijan, on Aug. 29. SOCAR takes a 50 percent interest in the Inam field while BP and Shell, the operators of the field, each occupy a 25 percent stake.
KNOC conducted a 90-day data evaluation and feasibility study to follow up on an MOU with Azerbaijan, reached during President Roh's state visit to the Central Asian country last May.
KNOC officials said KNOC decided to go into negations to take over a stake in the Inam field with the SOCAR side according to its initial evaluation that the field proves to be feasible. They said the Korean state-run corporation expressed the hope to complete the negotiations with the goal of taking over a 20 percent stake by the end of October and begin prospecting within this year.
On Sept. 1, KNOC singed a deal to joint tap the Zambyl offshore oil field with KazMunaiGaz (KMG) in the Caspian Sea, Kazakhstan in the Kazakh capital of Astana.
Under the deal, Korea is allowed to have access to up to 500 million barrels of crude oil. The Zambyl field is estimated to have reserves of about 1 billion barrels of crude oil, equivalent to 1.2 year-old oil consumption in Korea. nw




Minister of Commerce, Industry and Energy Chung Sye-kyun

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