President Lee Myung-bak on Tuesday hailed a huge contract won by South Korea to develop oil fields in the United Arab Emirates as a milestone that puts the resource-scarce nation in the ranks of major oil developing nations and could open the door to bigger contracts in the region.

On Monday, a South Korean consortium led by the state-run Korea National Oil Corp. signed a contract with the Abu Dhabi National Oil Co. to develop three oil fields in the Middle Eastern nation, which are expected to yield up to 43,000 barrels of oil per day.

The three areas are said to hold 570 million barrels of oil initially in place, which refers to the amount of oil potentially in the areas rather than the amount that can be recovered. South Korea will be entitled to 40 percent of total production, or about 17,000 barrels of oil per day.

“Korea has obtained the right to develop oil fields in the Middle East, which has so far seemed to be beyond our reach. Now, Korea has become one of a select few oil developing nations,” Lee said in his biweekly radio address.

Lee emphasized the contract as a “great stride on the path toward energy security.” The UAE has the sixth-largest crude oil reserves in the world and the area of two of the three oil fields to be developed is colossal, tantamount to one-tenth of the total area of Abu Dhabi, he said.

Lee indicated more such contracts were likely.

“Currently, Korea is engaged in negotiations with the UAE to develop another oil field. The nation has been given a priority right to participate in the development of a gigantic oil field that could produce more than 1 billion barrels,” he said.

“There is a chance that the signing of the contract with the UAE will lead to a second Middle East boom,” he continued. “Korea is already working with the UAE in the construction of a nuclear power plant in that country. Last year, Korea sent 1,000 nuclear professionals there. A total of some 30,000 additional workers are expected to be needed over the years up to 2020.”

Lee said the rate of South Korea’s self-sufficiency for petroleum and natural gas rose to 14 percent from a 4 percent range during his term. The government will try to boost that to 20 percent this year, a level similar to that of Japan, and 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,” he said. 

(Yonhap News)