Asian ascension

March 29, 2002
The Republic of Korea (South Korea) became a full member of the Paris-based International Energy Agency Mar. 28.

The Republic of Korea (South Korea) became a full member of the Paris-based International Energy Agency Mar. 28.

"We heartily welcome [South] Korea into the IEA," Robert Priddle, the agency's executive director, said. "The country's very robust economy and its key strategic position in East Asia mean that its presence among us will greatly enhance energy security in its region and throughout the world."

South Korea formally applied for full IEA membership in April 2001. Since then, it has enjoyed the status of a "de facto member country," according to IEA. The country also met a key requirement of full membership status last year by setting aside aside emergency oil stocks equal to 90 days of oil imports administered by state-owned Korea National Oil Corp. (KNOC). Before its IEA application, the country had a 60-day reserve.

It has also accepted the obligation to implement demand-restraint and allocation measures in case of emergency, IEA said.

Energy dependent

South Korea is the 6th largest oil consumer and 4th largest crude oil importer in the world, according to the US Energy Information Administration.

EIA said South Korea consumed slightly more than 2 million b/d in 1999, down from a high of 2.4 million b/d in 1997, all from imported sources. Similarly, South Korea now relies on imported LNG to meet natural gas demand, although the country anticipates being a minor natural gas producer within 2 years from the Rong Doi concession, about 174 miles off the Vietnamese port of Vung Tau. KNOC predicts that proven gas reserves there will be 1 tcf. KNOC holds a 55% stake in the field and is the operator of Rong Doi; ExxonMobil Corp. has a 45% interest.

Through Rong Doi and other exploration projects, the South Korean government has set an ambitious goal for KNOC to provide 10% of the country's energy needs by 2010. KNOC currently has 19 overseas exploration and production projects in 12 countries. These include 4 producing fields in Yemen, Argentina, Peru, and the North Sea; 2 fields nder development in Yemen and Venezuela; and 13 overseas exploration projects, EIA said.

Robust demand

Oil makes up the largest percentage of South Korea's total energy consumption, though its share has declined in recent years. Petroleum accounted for 58% of primary energy consumption in 1999, EIA said. But future demand is expected to be robust both within South Korea and for many of its neighbors, particularly China, which is not an IEA member.

US statistics predict that the US recession that had a ripple effect on South Korea and other exporters of high-technology goods may be receding.

Therefore, South Korean energy demand growth within 5 years could be as much as 4%/year, almost double what it is now.