By Ryu Jin
Staff Reporter
A South Korean consortium led by the Korea National Oil Corp. (KNOC) has secured the right to develop oil fields in a northern Kurdish-controlled area in Iraq, according to the state-run oil firm Thursday.
In a related move, Ssangyong Engineering & Construction and other local builders also struck a deal for a reconstruction project worth 10 trillion won ($10.5 billion) in the war-torn country.
Signed in Seoul between the KNOC-led consortium and the Kurdistan regional government, the latest oil deal is expected to pave the way for local firms to gain access to 1-2 billion barrels of untapped crude, an amount enough to supply the energy-poor country for up to two years.
It is the second agreement of its kind since the KNOC signed a deal last November for development of the Bazian oil field in the same region, which is estimated to have at least 500 million barrels of crude. South Korea consumes about 800 million barrels of oil per year.
In exchange for the Bazian deal, five local builders including Ssangyong E&C, Doosan Construction & Engineering and Kukdong E&C decided to form a different consortium to build roads, power plants and other social infrastructure in the Kurdish-governed area.
But the latest oil deal is feared to trigger further diplomatic friction with Baghdad, which insists that all oil deals be approved by the central government. In January, the federal government halted oil exports to SK Energy, the top South Korean refiner.
South Korea, which has kept rehabilitation forces in the northern Iraqi town of Irbil since 2004, has been seeking business opportunities in the Gulf state.
President-elect Lee Myung-bak, who met with Prime Minister Nechirvan Barzani of the regional government, said that his incoming administration wants to contribute to the reconstruction and development projects in Iraq, including the northern Kurdish region.
``I was in the Kurdish region long before and have special interest in it,’’ Lee said, referring to his trip to Iraq while serving as CEO of Hyundai Engineering and Construction decades ago.
``The Kurdish area is rich in oil resources. I hope the regional government will continue to give a lot of business opportunities to Korean companies,’’ he added.