S Korea, Japan at odds over 'formalizing' Asian oil cooperation

New Delhi (Platts)--25Nov2005

The South Korean and Japanese energy ministry delegations at an Asian oil
consumer-producer countries dialogue in the Indian capital of New Delhi locked
horns over a Korean proposal to establish a joint working group to advance
a master plan for an oil and gas transportation system for all of Asia. 
     The proposal, put forth by Korea's Minister of Commerce, Industry and
Energy Lee Beom-Hee to his counterparts at the roundtable, was met with
"concern" in note circulated by the Japanese delegation to the participants, a
delegate told Platts. Though the cause of the Japanese concern was not
entirely clear, the feeling was that the Japanese were against
"institutionalizing" energy cooperation, the delegate said.
     Lee mooted the etablishment of a "working group" involving all the Asian
countries, to work on energy cooperation, and suggested its first meeting be
held in South Korea in the first half of 2006. The working group's findings
could be tabled at the following ministerial meeting, the MOCIE minister said.
     The working group would create a master plan to link all the points in
Asia in a "Inter-Asia Oi and Gas Transportation System," Lee said. "And this
plan must reflect the universal interests of Asia, rather than being
member-specific," he added. 
     The Japanese appeared to favor bilateral dialogue among the Asian
producer and consumer countries, but did not warm up to the idea of a formal
regional grouping, he said, possibly because it would involve "more
compromises."
     Japan and South Korea are both members of International Energy Agency, an
intergovernmental body of the world's 26 industrialized countries that works
for security of energy supply. 
     Japan and South Korea are the world's second and fourth largest crude
importers respectively, fully dependent on imports to meet their needs. The
first and third place in global crude import volumes is occupied by the US and
China.  
     The Korean minister's proposal, made during his opening remarks at the
start of the day-long roundtable, though, was warmly greeted by the host,
Indian oil minister Mani Shankar Aiyar.
     The ministerial roundtable, entitled "Cooperation between North & Central
Asian Producers and Principal Asian Consumers," is the initiative of Aiyar,
who held a similar meeting in January this year. The January roundtable was
the first event of its kind, bringing together the principal oil consumers in
Asia with the Middle Eastern producers.
     The participants in Friday's conclave are oil producers Russia,
Azerbaijan, Turkmenistan, Kazakhstan, and Uzbekistan, the vital transit
country of Turkey, and major consumers China, Japan, South Korea and India.
--Vandana Hari, vandana@platts.com

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