More Participation Needed in Iraqi Reconstruction Projects

Though South Korea deployed the third-largest number of troops in Iraq, following the US and the UK, its participation in Iraq’s oil development and reconstruction projects has been insignificant. Even in the Kurdistan region, where Korean armed forces are stationed, South Korea cannot utilize the advantage of being one of the largest contingents. The reason is that the government has restricted the advances of Korean businesses into the region for safety concerns.

A ruling Uri Party lawmaker, Han Byeong-do, is the chairman of the special committee of Iraqi reconstruction. He acquired the Korean National Oil Corporation’s report named ‘Petroleum Development in the Kurdistan Region` on April 5. The report says a Norwegian petroleum company, DNO ASA, made a production sharing agreement (PSA) with the regional government for exploring several oil fields in 2004. And the company succeeded in drilling last June and November. Other petroleum companies in Turkey and Canada also had the PSA and conducted drilling three times last year.

But it was only February when the consortium of Korean businesses was formed and visited the Kurdistan region, and the group is still in discussions with the Kurdistan government about where to explore for oil. The Kurdistan region has five oil fields containing 3.1 billion barrels.

The South Korean government does not allow Korean companies to make inroads into the region due to safety concerns.

According to the reference material about the Iraqi construction market by the Ministry of Construction and Transportation, South Korean businesses are securing fewer orders than before even though demand is high due to Iraqi reconstruction efforts. Korean companies won 73 construction projects and earned $6.45 billion from 1977 to 1991 (before the first Gulf War). After the outbreak of the second Gulf War, however, they had received just $0.3 billion in orders from March 2003 to last August. Kuwait and Saudi Arabia won $2.3 billion in orders and $1.2 billion in orders in 2005.

Under such circumstance, the visit of Iraqi Prime Minister Nouri al-Maliki to South Korea could be a good opportunity for Korea to intensify diplomatic efforts. During his visit from April 11 to 13, he will be accompanied by 25 attendants including the Oil and Electricity Ministers, and take part in a summit talk with Korean President Roh. In the talk, they will discuss the two nations` cooperation in the natural resources development and construction projects and increasing the Korean government’s participation in the reconstruction of Iraq.

The Iraqi government is keen for South Korean businesses to take part in the reconstruction projects more. According to one South Korean lawmaker who visited the city of Najaf on January, the mayor of Najaf, Assad Sultan Hakim, proposed 15 reconstruction projects totaling $76.41 million, including designing projects for clean water supplies and preparation projects for an electricity supply chain, with South Korean businesses.

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