22-11-04

Moon Chung-in, chairman of the Committee on Northeast Asian Cooperative Initiative was quoted as saying that Korea, Japan and China were getting closer to striking a deal that would allow them to make joint purchases of crude oil by the three countries that rely on overseas natural resources.
"The government is doing all it can to collaborate with Japan and China on this issue to cut oil import costs, and I believe we will soon see some results, especially given that combined, the three countries form a major demand source for Middle East exporters," Moon was quoted as saying.

Compared to exports to Europe, an additional $ 0.83 is added to each barrel of crude shipped to Asia. The premium reflects the inability of the Asian countries to purchase oil from regions outside the Middle East due to cost factors.
Officials from the Ministry of Commerce, Industry and Energy also conceded that although the details had yet to be thought through, the government was "keen on pushing for a good outcome," regarding a joint oil purchasing scheme.

Japan is the world's second-largest consumer of oil, followed by China in third place and Korea in sixth. In terms of oil imports, Korea ranks fourth. Last year, it bought more than 800 mm barrels.
"The heavy amount we import is another leverage we can use to persuade the Middle East to see things our way," Moon said.

Korea has long struggled with its unfortunate lack of natural resources. This year, the country made some breakthroughs and began commercial production of LNG from its first offshore gas field in the East Sea. The field is believed to hold reserves of 5 mm tons.
An expected 40,000 tons will be extracted annually until 2018, according to the Korea National Oil Corp.

Source: Emirates News Agency