By Jung Sung-ki
Staff Reporter
The top South Korean diplomat in Houston advised more Korean firms to enter the energy market in the Texas region, and to increase their cooperation and information-sharing with U.S. and other worldwide energy giants there.
Houston, known as the "energy capital of the world," can offer knowhow to South Korean companies on the exploration, development and marketing of energy resources, particularly oil and natural gas, Consul General Cho Yun-soo said in an e-mail interview with The Korea Times.
Since its inauguration in February 2008, the Lee Myung-bak administration has pushed to bolster energy diplomacy aimed at securing more resources abroad.
"If you look at worldwide companies operating in Houston now, there are about 300 British firms, 200 French companies and even 120 firms from Norway with population of only 2.4 million," Cho said. "On the other hand, there are only 24 companies, mostly conglomerates, from South Korea, which are endeavoring to secure resources."
In Houston, the largest city in the state of Texas, five of the six biggest energy companies in the world maintain a large base of operations. They include the international headquarters of ConocoPhillips, the operational headquarters of Exxon-Mobil, the headquarters for Shell Oil and the head office for BP. There are also major offices for Chevron, Citgo, Apache and Horizon Wind.
There are upstream and downstream activities regarding the production of crude oil, natural gas and liquefied petroleum gas (LPG). The downstream covers the development, refinery, marketing and storage of oil and a range of petroleum products, petrochemicals and LPG.
Most upstream activities are undertaken in Middle East nations, Russia, and South American and African countries. But more than 70 percent of international companies dealing with downstream operations and related advisory organizations are based in Houston and adjacent areas, said the consul general, who took office in February last year.
"South Korean companies have very strong potential in the downstream development of oil products, such as cargo vessels, deep sea platforms and oil pipelines, while they need to further develop skills for exploration, production and marketing," he said.
He continued, "There is a perception that only conglomerates will be able to enter the Houston market because the oil industry is so big in scale, but many industry experts here say small- and medium-sized Korean companies, which are recognized for their high technical skills, could well compete here in the oil sector."
A host of meetings related to energy issues are held in Houston every year. So Korean companies are encouraged to attend the gatherings of oil policymakers and businessmen to gauge the possibility of their advance into the market and share up-to-date information with other participants from oil producers and importers as well as big and small firms worldwide, Cho said.
Major meetings there include the Cambridge Energy Research Associates (CERA) Summit held every March and the Offshore Technology Conference (OTC) in May, he said, adding about 70,000 representatives from 134 nations took part in those meetings last year.
"Representatives from the Korea Chamber of Commerce and Industry and the Small and Medium Business Administration need to visit Houston and look at their potential of the market here," he said. "They could be advised by Korean experts with local companies."
Major oil companies in the world held approximately 85 percent of oil resources in the 1960s and 1970s. Now, oil-producing nations or their oil corporations have some 93 percent of the total resources.
Global oil consumption per day recorded about 83 million barrels as of 2008. Even Exxon-Mobil, the world's largest oil company, produces 3.9 million barrel per day, just five percent or less of the demand.
South Korea has no domestic crude oil production and is completely dependent on imports for its oil consumption. It is the world's seventh largest oil consumer.
The consul general referred to the Texas Medical Center (TMC) as a great model for Korea's plan to build an advanced medical complex.
Last year, the Ministry of Health, Welfare and Family affairs selected Osong in North Chungcheong Province and Shiseo in Daegu as sites to build high-tech medical complexes with an investment of about $5 billion, as part of efforts to make the country a regional medical hub.
Houston-based TMC is the largest medical center in the world with one of the highest densities of clinical facilities for patient care, basic science and translational research.
The center has 140 buildings in which about 73,000 personnel from 47 medicine-related institutions treat an average 5.5 million patients every year. Some 200 Korean doctors are working or studying at the center.
"TMC is a 60-year-old model for our government's effort to build the Osong-Shinseo medical complexes," Cho said, adding Qatar, Turkey and China are seeking to cooperate with the center. "The center provides a combination of treatment, research and education, creating a $5.7-billion regional economic effect annually. We need to seek ways for bilateral cooperation."
Since assuming his post, Cho has been active in promoting South Korea to locals.
Last month, he presented the library of Houston's Rice University with a set of Korean dictionaries and encyclopedias to help U.S. students better understand Korea.
"There was only one dictionary from Korea, which was from the 1960s," he said. "The new dictionaries are an important update, better reflecting South Korea in its present state."
Cho's consulate office held events last year to promote Korean food in Houston, Dallas, San Antonio and Mississippi. The office has jurisdiction over the five southern states of Texas, Arkansas, Oklahoma, Louisiana and Mississippi, where nearly 170,000 Koreans reside.
"Locals are still not well aware of South Korea, but their interest in East Asian nations such as China and South Korea is increasing slowly but surely," the diplomat said.
Cho, who began his diplomatic career in 1981, served in Boston, Russia, Germany, Singapore and Kuwait.
He received an M.A. in economics from the University of Rochester in New York.