Iraq seeks more oil cooperation

By Kim Se-jeong

Iraq seeks to step up collaboration with South Korea in the energy sector, according to Iraqi Oil Minister Abdul Karim Luaibi.

“We are looking forward to strengthening cooperation (with Korea),” the minister told The Korea Times on April 30, while staying in Seoul for a four-day visit.

He met Yoon Sang-jick, the minister of trade, industry and energy, and signed an agreement to beef up bilateral oil cooperation.

The Iraqi minister also met representatives of major private and public oil companies and construction companies and visited major oil and gas-related infrastructure sites.

Oil is an important pillar in the Iraq-Korea cooperation.

According to the Korea National Oil Corp. (KNOC), last year alone, nearly 10 percent of Korea’s oil consumption was met by Iraq. Major private oil companies buys Iraqi oil.

Construction sector is another.

Hanwha Engineering & Construction won last year Bismaya housing project worth almost $8 billion.

The project is to build 100,000 houses and other urban infrastructure in a suburb of Baghdad. The size of the land is 1,830 hectares, and the project will take an estimated seven years to complete.

In an interview with The Korea Times, Iraqi Amb. Al-Mosawi said the project would contribute to making a “Miracle on the Tigris.”

Oil is Iraq’s biggest export commodity, and the most important component in its economy.

Grappling with the post-U.S. invasion in 2003, the country has large scale reconstruction projects to pay for. Recently, Iraq said it would make a production target of 9 million barrels a day by 2017 triple the current amount.

According to the U.S. Energy Information Administration (EIA), as of 2012, Iraq has the fifth-largest proven oil reserves in the world, and is the sixth-largest net exporter of petroleum. It was the second-largest producer of crude oil in OPEC at the end of 2012.

The majority of oil exports go to the United States and to refineries in Asia.

For Iraq, Korea is its fifth-largest customer, following the United States, China, India and the European Union.

Iraq’s interest in Korea boils down to two areas.

First, the Middle East country wants to attract more South Korean companies to build energy-related infrastructure.

The EIA said poor infrastructure obstructs Iraq from meeting its ambitious production target.

“Mainly we need construction companies with experience. We have many projects for the treatment of oil and gas, and bigger projects for tanks and service facilities,” the minister said.

He also mentioned an oil field development project in Nassiriya, southern Iraq, which needs a major oil refinery.

Second, Iraq seeks to rent Korean oil storage tank.

“Here in Korea, we are trying to rent your storage facilities to store some Iraqi crude oil and sell it from here,” he said.

Iraqi Ambassador to Korea Khalil Al-Mosawi said the Korean side has agreed to offer space for 4 million barrels from next year, although KNOC, which manages storage tanks, refused to confirm this.

Minister Luaibi assured that security in the country, especially on the project sites, was fine.

“Political disputes have no major effect on the ministry’s oil projects,” he said, calling the Korean government to lift a travel ban on Iraq and resume direct flights to the country.

Iraq is among four countries under a travel ban imposed by the Ministry of Foreign Affairs, and this will expire this summer.

Oil field development in northern Iraq is often met with opposition from the Kurdistan Regional Government (KRG), which claims sovereignty over the fields.