Korea to Develop Kurd Oil Fields

A Korean consortium led by state-owned Korea National Oil Corporation and Ssangyong Engineering & Construction Co. signed a memorandum of understanding with the Kurdistan Regional Government yesterday to develop four oil fields in northern Iraq and construct infrastructure.

A Dong-A Ilbo reporter found out that the Korean consortium consisting of KNOC, Daesung Engineering & Construction, Samchully, and UI Energy has secured the rights to develop three oil fields nearby Arbil, capital of the Kurdish autonomous region, and another one in Dahuk region of northern Iraq.

After signing the MOU, Kurdish Prime Minister Nechirvan Barzani said, “The two sides will go through additional negotiations and reach a final agreement within two months,” at a press conference held at the Shilla Hotel in central Seoul. But, the Kurdish prime minister did not announce locations of the four oil fields and estimated oil deposits.

Explaining why he chose the Korean consortium as his nation’s partner to develop oil and construct infrastructure, the prime minister said, “It is natural to consider firms of the nation dispatching its army (to Iraq) before corporations from other nations. And, we want to learn from Korea which has successfully reconstructed itself after the devastating war.”

A KNOC source said, “The four oil fields are estimated to hold more than 1 billion barrels at the minimum and up to 2 billion barrels. However, we cannot rush to make a public estimation since we have yet to begin exploration.”

Apart from oil exploration, Korea’s construction consortium led by Ssangyong Engineering & Construction, Doosan Construction & Engineering, Kukdong Construction will build a 450-kilometer-long four-lane highway connecting Zakho, Arbil, and Sulaimaniya with 2 trillion won and participate in constructing infrastructure such as water supply and drainage facilities and petrochemical plants worth 10 trillion won.

President-elect Lee Myung-bak met the Kurdish prime minister and discussed measures for economic cooperation at his office in Tongui-dong, Jongno-gu, Seoul.

The president-elect said, “I hope your government will give more opportunities to Korean firms so as to help them to participate in developing oil fields in the Kurdish region.” The prime minister said in response, “I will make an effort to give a priority to Korean firms (regarding natural resource development).”

changkim@donga.com koh@donga.com