By Ryu Jin
Staff Reporter

South Korea unveiled an ambitious plan last week to raise the ``self-sufficiency’’ level in oil and gas development from the current 3 percent to 28 percent in the coming decade by increasing production of its state-run and private companies abroad.

Without concrete details, however, the government is criticized for only drawing a ``hollow’’ picture amid the intensifying energy war around the world in the 21st century, according to experts.

Some critics point out that the government’s optimistic approach, largely based on ``unrealistic’’ estimates, is only aggravating public distrust in the country’s energy development projects abroad.

War Without Gunshot

In the era of globalization characterized by unlimited competition across the border, the world is engaged in a war _ the ``energy war.’’ As of 2005, China had invested $17.7 billion; Japan $6.4 billion; and India $1.5 billion in their overseas oil development projects.

On the contrary, South Korea, which relies some 97 percent of its energy demand on imports from other countries, has spent only $950 million on oil exploration and development activities.

Last week, the Ministry of Commerce, Industry and Energy (MOCIE) said the country would invest some 10 trillion won ($10.7 billion won) to raise its self-sufficiency level in oil and gas to 28 percent by 2016.

A country’s self-sufficiency rate in development of energy resources is calculated by dividing the total amount of natural resources developed by state-run and private firms of the country in a certain year by the amount of domestic consumption.

South Korea’s self-sufficiency rate stood at 3.2 percent in 2006. While about 34 million barrels of oil and gas were produced by local companies around the world, some 1.09 billion barrels were imported from abroad in that year.

According to the government plan, about 28 percent of all gas and crude needed at home _ about 326 million barrels _ will be produced in overseas fields in 2016, almost a tenfold increase.

Officials said the government will spend 1 trillion won ($1.08 billion) every year for the next 10 years to support development in the energy sector and to help create a 500-billion-won energy fund to induce private capital into the project.

Vice Commerce, Industry and Energy Minister Lee Jae-hoon said offshore oil fields in West Kamchatka of Russia, Kazakhstan, Azerbaijan and the Aral Sea gas field in Uzbekistan are expected to raise the self-sufficiency rate in the coming years.

``Some 85 percent of the 53 oil and gas fields secured under the incumbent administration are in the stage of exploration,’’ he told reporters. ``Output will rise sharply once large-scale production begins in 2011.’’

He added that the state budget would also be utilized to improve the technology level of the state-run Korea National Oil Corporation (KNOC), which has been spearheading various overseas exploration and production activities.

``At present, KNOC's technical capabilities are rated as being 50-60 percent those of major multinational oil firms,'' Lee said. Currently placed out of the global top-100 list in terms of size, the company aims to become one of the top 50 enterprises by 2015.

In addition, he went on, efforts would also be made to train more experts in energy exploration and development. South Korea has about 540 specialists, far fewer than the average 3,300 people that an oil company ranking 50th in the world has on staff.

Rosy Ambition

Critics and industry sources, however, call the government plan ``too rosy’’ since it depends largely on the ongoing exploration activities whose success rate stands at around 5 percent.

South Korean firms are currently engaged in a total of 96 oil projects abroad and 56 of them, or about 58 percent, are in the exploratory stage, though government officials claimed they have already taken such situations into account.

``It is nonsense if the government included the `imaginary’ oil in fields whose reserves have not even been evaluated yet, in the future production estimates,’’ a private company official said on condition of anonymity.

Lee, the vice minister, said the government goal of energy self-sufficiency was drawn up in consideration of future production abroad. ``We will try to achieve the goal by putting the overseas resources development system in good order.’’

But public distrust in the government blueprint keeps spreading. Indeed, it is not the first time that it set such a plan. In 2004, the goal for the year 2008 was 10 percent. But, now, the figure is expected to reach only 5.7 percent at most.

jinryu@koreatimes.co.kr