Korea budgets to stake out resources
SOUTH Korea, the world’s fifth-largest buyer of crude oil, will spend 10 trillion won ($11 billion) in the next decade competing with China and India to secure oil and gas supplies.
The Government will budget about 1 trillion won each year to fund stake purchases by state-run and private companies in overseas projects, the Ministry of Commerce, Industry and Energy said.
Companies such as SK Energy and state-run Korea National Oil plan to increase investments in overseas oil, gas and minerals projects by 81 per cent to a record $3.8 billion this year, the ministry said in March. China, the world’s second biggest energy consumer, said in January it might use its foreign reserves to buy ‘‘ strategic’’ resources.
‘‘ Competition and prices for raw materials is forecast to continue rising because of rapid economic growth in emerging markets such as China and India,’’ Finance Minister Kwon Okyu said in a statement. The Government ‘‘ will actively seek investment activities such as stake purchases in the development of overseas resources to secure stable supplies’’.
South Korea, importing 97 per cent of its energy and resource needs, will step up diplomatic efforts and offer ‘‘ package deals’’ such as power plants and roads to acquire oil and gas fields in areas such as Central Asia, Africa and South America.
Output from South Korean companies’ overseas stakes in iron ore, coal, uranium, copper, zinc and nickel may reach as much as 50 per cent of domestic demand by 2016 from none in some minerals last year, according to the ministry. Bloomberg