Oil Diplomacy in Full Swing

KNOC, SK Corp. sign MOU with Pertamina to search for oil in Indonesia

The Korea National Oil Corp.(KNOC) jointly with SK Corp. signed an MOU with Pertamina for exploration of oil and gas in Indonesia on May 2nd.
The signing took place in Jakarta, Indonesia, by officials of the three companies to jointly explore for oil in Indonesia and other countries including the exchange of technologies related to oil exploration.
Details of the cooperative tie will be worked out by experts of the three companies involved in the deal, which will include provisions for mutual participation in the projects for exploration of oil in terms of both investment and exploration activities.
Under the terms of MOU, they will search for prospective oil fields in Indonesia based on terms and conditions signed shortly. The three companies also agreed to have close cooperation in the areas of technology, information exchange and the R&D activities for closer relations among them for a high synergistic effect.
The three partners will hold experts meetings whenever necessary to discuss a joint undertaking in projects, including the exploration of oil fields.
The partnership that brings the three companies together with invaluable experiences in the oil business together in the age of an intense competition, building a strong cooperative system is expected to make a huge contribution to securing energy resources to the country.
President Hwang Doo-yeol of the KNOC and President Shin Hun-cheol of the SK Corp. was part of the Korean economic delegation to Indonesia April 30-May 3. The delegation led by Commerce, Industry and Energy Minister Kim Young-joo and Chairman of the Korean Chamber of Commerce and Industry Sohn Kyung-shik discussed the issues of economic cooperation between Korea and Indonesia in wide-ranging areas including the exploration of oil and the construction of nuclear power plants in Indonesia.
Three MOUs were signed between Korean companies and Indonesian authorities and companies including an MOU on cooperation on oil exploration,
one for the development of coal mines between Korea Mining Corp. and the Indonesia Mining Corp. an MOU on setting up a joint venture on coal liquefaction and the construction of railroad and logistics terminal was also signed between Kenertec Co. and Nuansa Pt Co. of Indonesia.
Eight separate groups were formed to discuss the economic cooperation between Korea and Indonesia. They included the policy group that dealt with the EDCF projects in Indonesia to be financed with soft loans to be provided by Korea; the trade and investment group that dealt with the establishment of an investment cooperation committee between Korea Trade and Investment Promotion Agency (KOTRA) and the BKPM of Indonesia; the energy group dealt with cooperation in energy exploration and the construction of nuclear power plants in Indonesia.: the IT group discussed the cooperation on sharing high-tech IT such as those needed for WiBro and DMB: the defense industry group dealt with holding the 1st defense industry meeting between the two countries in August in Seoul; In addition, the two countries discussed Korea's investment in the forestation projects in Indonesia and setting up a committee on science and technology.
Korea, in the meantime, is being turned into an oil storage hub in Northeast Asia with various projects toward that direction taking hold in recent years.
The first stage projects will involve developing a 4.6 million barrel storage facility early next year, following the establishment of a joint corporation comprised of domestic and foreign companies in the oil industry by November this year, KNOC officials said.
The second stage entails building a 23 million barrel oil storage facility, which will depend on the operation of the first-stage projects.
The government is counting on the projections that the oil industry in the Asia-Pacific region will soon equal that of North America, KNOC and government officials said.
Korea needs to build enough oil storage facilities to play the role of an oil storage hub in Northeast Asia. nw

President Shin Hun-cheol of SK Corp. shakes hands with President Widya Purnama of Pertamina after signing an MOU for exploration of oil in Indonesia and other cooperation. President Hwang Doo-yeol of the Korea National Oil Corp. stands between them as KNOC also is party to the MOU. Minister of Commerce, Industry and Energy Kim Young-ju,1st right, is with them.