By Na Jeong-ju
President Lee Myung-bak urged firms Thursday to step up efforts to develop overseas resources, saying securing stable energy sources was a “war.”
He stressed overseas energy development was crucial to protect a resource-scarce country like Korea from sharp fluctuations in international prices and exchange rates.
“Securing resources is important for our future development. That’s why we should make greater efforts to develop overseas resources,” Lee said during an economic policy meeting. “Securing energy sources is a war.”
The country is the world’s fifth-largest crude oil consumer, but relies on imports for all of its oil needs, leaving its economy very vulnerable to fluctuations in oil and other raw materials prices.
By next year, Korea is expected to get as much as one-fifth of its energy needs from its overseas development projects. That will make the country’s economy more resistant to price and exchange rate fluctuations, Lee said.
“A key to resources development is to get into places where nobody goes,” said the CEO-turned-President.
At the meeting, the Ministry of Knowledge Economy revealed a plan to nearly double its crude oil and natural gas self-sufficiency level by 2012 to support economic growth and enhance the country’s energy security.
The increase will push up self-sufficiency of fossil fuel resources to 20 percent of domestic demand by 2012 up from 10.8 percent tallied for last year.
The recent spike in international commodities prices has also spurred the need to secure more overseas operations to better insulate the country from possible supply shortages.
The country’s oil and gas self-sufficiency rate stood at just 4.2 percent, or 125,000 barrels per day in 2007, but the number rose to 342,000 barrels in 2010, as state-run and private energy companies moved to buy stakes in foreign fields.
The ministry also said it will raise reserve levels for bituminous coal, uranium, iron, copper and nickel from the 27 percent reached last year to 32 percent in 2012.
President Lee has tried to boost Korea’s stakes in overseas resources development projects as a way of securing stable energy sources. During his visit to the United Arab Emirates in March, the country clinched its largest-ever oil field development deal, potentially valued at 110 trillion won ($98 billion).