Kurdish oil project labeled a bust

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Kurdish oil project labeled a bust


Korea National Oil Corp. has failed in its bid to find crude oil in the Kurdish region of northern Iraq, a ruling party lawmaker said yesterday.

Lee Hak-jae, a Grand National Party congressman, said the KNOC drilled three holes in as many oil fields but has found little or no reserves. It has begun work on a fourth - of a total of five planned - but the prospects of unearthing oil there are slim, he added.

Refusing to accept such a judgment, the government denied the project had fallen flat.

The project got under way with much fanfare in February 2008 and was promoted as a diplomatic success in terms of the overseas exploration of natural resources in what now looks like a premature wave of euphoria.


At the time, President-elect Lee Myung-bak visited the Kurdish region and met his counterpart Massoud Barzani. Their discussions led him to forecast that the work would yield 1.9 billion barrels of crude - enough to feed demand in Korea for two years - as well as infrastructure construction deals worth $2.1 billion.

The KNOC signed a contract with the Kurdish autonomous government in June 2008 despite strong resistance from Iraq’s central government, which has traditionally dealt with such exploration works.

Iraq labeled the contract unlawful and severed an oil-exporting contract with SK Energy, one of KNOC’s partners in the ongoing oil-exploration work.

“The development of overseas natural resources comes with huge risks attached and needs to be thoroughly reviewed in advance,” Lee said. “But it was glorified as [a significant diplomatic gesture] and not enough consideration was placed on its commercial value.”

The KNOC has a different level of interest in each of the five fields. Evaluations on three - Bazian, Qush tappa and Sangaw North - are ongoing in the wake of drilling while the Sangaw South oil field is still being explored.

Work has yet to begin on the Hawler Area field, which the KNOC does not have a controlling stake in. Equally, it only has a minority right in the Sangaw North field.

Crude oil was detected in Bazian but the findings fall far short of the original expectation of 1.3 billion barrels, and little if any of it seems to be of commercial quality. The KNOC holds a 50.4 percent stake in this field. SK Innovation owns 15.2 percent.

At Sangaw North, drillers only found water and tiny pockets of natural gas. Drilling to depths of 2 kilometers (1.2 miles) at Sangaw South - roughly half the planned distance - has shown little promise of turning up anything of value.

Lee said the state-run KNOC has effectively poured 440 billion won ($400 million) down the drain. Just over half of the sum was paid to the Kurdish government in the form of an advance bonus.

The project was besieged from the beginning with complaints that oil reserves in the area had not been verified.

Under the terms of the original deal, the KNOC agreed to explore and receive oil in return for building $2.1 billion worth of infrastructure. However, a consortium of companies formed by the KNOC failed to come up with the funds need to finance the arrangement, leading to renegotiations that are ongoing, Lee said.

“We’re now renegotiating the deal with the Kurdish government, but we are not in a position to talk about what is being discussed,” said Jeong Gwon, a deputy director at the ministry’s department of natural resources.

The Kurdish government has also backtracked. In 2008, it promised to provide 65 million barrels of crude oil if the fields do not yield acceptable deposits of crude, but it has now downwardly revised this number to 20 million barrels.

In exchange, it is now seeking a cash payment of $1.2 billion and infrastructure work worth $700 million, Lee said.

Furthermore, the Iraqi central government has blacklisted the KNOC, causing it to miss out on preliminary qualification for other potentially lucrative oil-drilling projects in Iraq, he added.

By Limb Jae-un [jbiz91@joongang.co.kr]

한글 관련 기사 [뉴시스]

"석유공사, 쿠르드 원유개발 4400억 날리고 실패"

정부 자원외교의 첫 결실이라던 이라크 쿠르드 사업이 사실상 실패했다는 주장이 제기됐다.

16일 한나라당 이학재 의원(국회 지경위)이 한국석유공사로부터 제출받은 국정감사자료에 따르면 쿠르드 유전개발사업은 탐사시추결과, 원유가 없거나 원유가 발견됐더라도 당초 기대매장량에 크게 미치지 못해 경제성이 떨어지는 것으로 나타났다.

또 석유공사는 쿠르드 정부의 요구에 따라 보장원유 6500만 배럴 대신 생산광구 2개(Shaikan, Akri-Bijeel)와 교환하고, 당초 19억 달러의 SOC 사업을 하기로 계약한 것과 달리 7억 달러만 SOC사업을 진행하고 12억 달러는 현금으로 지급하기로 계약 변경을 검토 중이다.

이 의원은 생산광구 2개에서 확보할 수 있는 원유는 보장원유 6500만 배럴에 못 미치는 2000만 배럴에 불과하고, SOC 대신 현금으로 12억 달러를 지급하면 우리 건설사의 수주가능성을 보장할 수 없기 때문에 당초계약과 비교해 큰 손해라고 지적했다.

이 의원은 "석유공사가 쿠르드 사업과 관련 기대매장량은 72억 배럴이고, 탐사성공시 한국측은 19억배럴의 지분매장량을 확보하게 될 것이라고 밝혔지만, 원유탐사 실패, SOC 축소, 이라크 중앙정부와 관계개선 실패 등, 석유공사가 수천억의 개발비용을 투자해서 쿠르드사업에서 얻은 것이 도대체 무엇이냐"고 비판했다.

이어 "쿠르드사업은 석유공사 대형화 논리와 자원외교에 급급한 정부의 조급함이 빚어낸 대표적 자원개발 실패사례다"며 "이번 사례를 계기로 해외자원개발사업 전반에 대한 철저한 점검이 필요하다"고 덧붙였다.

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