SEOUL, KOREA — President Lee Myung-bak: Although the weather is still a bit cold, it feels as if spring has already arrived due to the exciting news that Korea has its own oil fields in the United Arab Emirates. He went on to say that they made a contract with the UAE to guarantee a stable oil supply for Korea.
There is competition among to secure resources, especially oil. The demand has escalated due to the rapid growth of developing countries, though the oil supply has been volatile due to instabilities in the Middle East. Amidst the hostile situation, Korea has been able to secure oil fields in the UAE, and has made this accomplishment a great stride toward energy security.
After visiting the UAE in March 2011, our two countries signed an initial contract. We can say that the contract is now finalized. This contract was vital since the Middle East contains half the world’s oil reserves.
International powers have dominated the rights to develop the oilfields from the beginning. Since then, it has been nearly impossible for latecomers to get a foot in the door. The UAE is especially famous for high-quality crude oil and a stable investment environment, and thus has been a very difficult market to venture into.
After about 40 years, Korea has obtained the right to develop oilfields in the Middle East. Currently, Korea has become one of a select few oil developing nations. A relationship of trust with the UAE has served as a significant catalyst. Our country has finally set a milestone in its relatively short, 35-year history of resource development.
Since an MOU was signed two years ago, questions have been raised concerning the economic feasibility of the oil field development, though experts have already confirmed the feasibility. The agreement made with the UAE government was to keep negotiations under tightest secrecy. It was also a strategy to evade possible checks by major oil companies of advanced nations.
Oilfields that are relatively easy to develop will be utilized first and is expected to produce 43,000 barrels of oil a day in two years.
Currently, Korea is engaged in negotiations with the UAE to develop another oilfield and has been given the right to a field that could produce billions of gallons of oil. In addition to the UAE, Korea has also secured the priority right to develop five oil exploration blocks in the Kurdish region in Iraq.
There is a chance that the signing of the contract with the UAE will lead to a second Middle East boom when the countries in the region are preparing for the post-oil era. Korea is already working with the UAE in the construction of a nuclear power plant. Last year, Korea sent 1,000 nuclear professionals there and a total of some 30,000 additional workers are expected to be needed in the next 10 years.
Bak states that he has found very few countries that have a greater lack of natural resources than Korea. Unfortunately, Korea lacks natural resources and does not produce oil. Almost all Korea’s energy needs have been dependent on overseas suppliers. Korea is the fourth largest energy-importing and ninth largest energy-consuming nation.
In recent years, the Government has exerted great endeavors to develop energy and obtain self-sufficiency. Consequently, during the past four years, the country was able to increase its self-sufficiency rate of petroleum and natural gas to 14 percent from the 4 percent range that had persisted for a long time. This year, the Government will try to boost the self-sufficiency rate up to 20 percent. This will be a level similar to Japan’s, which will help substantially reduce the impact of any energy shock in times of crisis. In order to put a firm energy security system in place, the Government plans to raise the energy self-sufficiency rate to 35 percent by 2020.
For the sake of sustained economic growth and energy security, the country needs to develop oil, natural gas and other mineral resources without fail. When the Government and the private sector work together diligently, future outcomes can be even greater.
Relevant industries should constantly meet the challenge of new opportunities, and I ask the general public to give them enthusiastic support. The Government on its part will continue to bolster its backing in this area.
