Korea bud­gets to stake out re­sources

The Weekend Australian - Travel - - 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

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