This weekend, President Lee Myung-bak flew to Abu Dhabi to sign a memorandum of understanding allowing South Korea to develop oil fields in the UAE. South Korea gets the right to participate in the development of one or more oil fields with more than 1 billion barrels of recoverable reserves.
In late 2009, Mr. Lee flew to the UAE to sign a $20 billion deal for South Korean utility and construction firms to build several nuclear plants there. He will attend the groundbreaking of the first plant on Monday in Braka, about 300 kilometers west of Abu Dhabi.
The latest deal represents the first chance for South Korean firms to independently develop and operate oil fields. South Korea still needs to participate in further negotiations for the rights to oilfields, which will become available after the UAEs existing contracts expire in 2014.
For the UAE, the MOU means that South Korea will be allowed to participate in the production of 2.5% of its oil reserves.
When fully completed, the UAE-based oil production will raise South Koreas self-sufficiency rate for petroleum gas from 10.8% last year to around 15%. The country is aiming to reach a self-sufficiency rate of 20%, officials said. To do it, South Korean officials are looking to make development deals in other Middle East countries, including Iraq.
