Deals with Russia and Kazakhstan reduce dependency on Middle East oil sources
Agreements signed during South Korean President Roh Moo-hyun's visits to Russia and Kazakhstan last week reflect Seoul's bid to secure long-term sources of energy amid increasing demand from China and high oil prices.
With few natural sources, Asia's fourth-largest economy is dependent on imports to meet energy needs. It is the fifth-largest oil importer and lags only Japan in the import of liquefied natural gas.
A deal struck between the state-owned Korea National Oil Corporation and its Russian counterpart would allow the country to join oil exploration projects in Sakhalin and Kamchatka, which are said to have crude oil reserves of up to 1.7 billion barrels.
According to Seoul, a similar protocol with Kazakhstan will allow South Korea access to around 850 million barrels of crude oil in the Teniz region and around the Caspian Sea.
'It is the first time for Korea to join oil exploration projects in the East Siberian region, a treasure house of resources,' said industry minister Lee Hee-beom, echoing the mood in the media which reported the deals as a triumph of diplomacy.
South Korea badly needs to diversify its sources of crude oil and reduce its dependency on the Middle East, which supplies 80 per cent of its demand. Oil makes up about half of South Korea's total energy consumption.
