Energy diplomacy

South Korea is likely to see a sizable rise in its energy self-sufficiency as it has signed a memorandum of understanding (MOU) with the United Arab Emirates (UAE) on oil development. If the MOU becomes a reality the nation will be able to secure at least 1 billion barrels of oil from the Abu Dhabi oil fields.

The MOU, although nonbinding, is seen as a major breakthrough in President Lee Myung-bak’s energy diplomacy. The government should do its best to turn the MOU into a contract as officials of both countries are to hold negotiations on further details next year.

The nation has many challenges to meet in order to participate in the development of oil wells. Most of all, it must strengthen ties with the Middle Eastern country for successful oil exploration. The MOU came after Korea won a $20 billion deal last year to build four nuclear plants in the UAE. Seoul has also dispatched a military unit to train the Arab country’s special forces.

However, the Lee administration has come under criticism that Korea has made too many concessions to the UAE for the nuclear plant deal. Of course, the country had to offer various incentives to the UAE to beat out other competitors. But such criticism does not necessarily be used to denigrate the nation’s efforts to tap oil in the region.

First of all, the MOU can be used as a means to allow Korea to expand its energy self-sufficiency ratio to 15 percent from the current 10 percent. Announcing the signing of the MOU during his visit to Abu Dhabi on Sunday, President Lee vowed to ramp up the ratio to 20 percent before his term expires in February 2013.

We hope Lee will not fail to make good on his pledge. Lee has dedicated himself to energy diplomacy to raise the self-sufficiency ratio that stood at just 4 percent upon his inauguration. Now he can take credit for the double-digit figure.

Korea is the world’s ninth largest consumer of oil. About 96 percent of oil supply is imported. Against this backdrop, the country has pushed overseas oil exploration projects to ensure stable supply and cushion potential oil shocks. But no major progress has been made so far.

What’s at stake now is to realize Korea’s entry into the UAE’s oil development projects that have long been monopolized by a handful of drilling giants from the U.S., Britain, France and Japan. Things will change if Korea finds its niche in the oil fields. Let’s work together to step up our energy diplomacy.