Baghdad Threatens
to Stop Oil Supply To South Korea
By Yoon Won-sup
Staff Reporter
Korea Times
The Iraqi government warned that it would stop exporting its crude oil to Korea
unless Korean companies drop its oil field development project in the Kurdish
government-controlled Bazian, according to the government Monday.
The Ministry of Commerce, Industry and Energy, the Ministry of Foreign Affairs
and Trade and relevant companies held a discussion regarding the situation.
Currently, 5 percent of imported crude oil comes from Iraq, which is an increase
of 3.3 percentage points from last year, due to the government's oil source
diversification policy.
The Iraqi government has opposed all oil projects by foreign companies in Bazian
as the region governed by the Kurdish government and not the central government.
``It is against the Iraqi government policy for foreign companies to make
contracts with the Kurdish government,'' a government official told The Korea
Times on condition of anonymity. ``The Iraqi government warned that it could
take action to prevent it.''
A Korean consortium led by the state-run Korea National Oil Corporation (KNOC)
has won exploration rights to the Bazian Block in Iraq, estimated to hold
potential reserves of 500 million tones, according to reports.
The exploration in Bazian, which is near ARBIL where Korean troops have been
stationed since 2004, is scheduled to start next month and continue for three
years.
The consortium is led by the KNOC with a 38 percent stake, and several private
energy players, including SK Energy with 19 percent.
Seoul is trying to confirm the intentions of the warning through its embassy in
Iraq, according to another government official. If the warning is legitimate,
Korea will likely suffer from the lack of oil supply. The companies involved are
also expected to suffer as they have already made an investment.
