By Kim Tae-gyu
The Korean government signed an agreement with Iraq, under which the former will be able to secure the rights to around 10 percent of its annual demand for crude oil from the latter in an emergency.
Korea’s Knowledge Economy Minister Choi Joong-kyung signed the deal Thursday with Hussain Ibrahim Saleh Al-Shahristani, the Iraqi deputy prime minister for energy, as the two nations’ Presidents looked on.
``As a contingency, Iraq will provide at least a quarter million barrels of crude per day, which is more than 10 percent of our daily imports,’’ said Moon Jae-do, director general at the Ministry of Knowledge Economy.
``In return, the Iraqi government wants Korean companies’ proactive participation in rebuilding its social infrastructure. We plan to encourage our entities to do so down the road.’’
Moon said Korea will be allowed to practice the rights for Iraqi crude oil when the world’s petroleum market suffers extraordinary situations. Specific conditions for the contract will be negotiated later.
He said that the deal is equivalent to raising the country’s self-sufficiency ratio of oil and gas by 8 percent. Korea has strived to increase the ratio as the world is battling to secure raw materials.
According to the latest data of the Organization of Petroleum Exporting Countries (OPEC), Iraq has the world’s fourth-largest amount of crude oil in terms of known reserves, trailing Saudi Arabia, Venezuela and Iran.
Shahristani said that the Iraqi government hopes to expand bilateral cooperation between the two countries not only in the energy segment but also other industries such as construction and housing.
The deputy prime minister, one of the most respected politicians in the war-battered country, said that Iraq hopes to emulate Korea, which has successfully chalked up industrialization in the aftermath of the Korean War.
``We hope Korean companies help rebuild roads, bridges, schools and houses,’’ he told The Korea Times on Wednesday at the Lotte Hotel Seoul. ``We are impressed by the way the war-torn country succeeded in rebuilding to be very prosperous.’’
Shahristani studied at Imperial College London and received his Ph.D. from the University of Toronto in 1970 where he majored in chemical engineering.
The nuclear scientist served as Minister of Oil back in 2010.