Yesterday was Gyeongchip, the end of hibernation according to the 24 seasonal divisions. The weather is still chilly, but it feels as if spring has already come. In this pleasant season, I have good news to share with you.
Yesterday, the contract to develop oilfields in the United Arab Emirates was concluded. We now have our "own oilfields." The contract will guarantee a more stable oil supply for our country.
Nowadays, there is relentless competition among nations to secure resources to the extent that the rivalry has escalated into a new type of war. That is because the demand for resources has surged due to the rapid economic growth of developing countries and, making matters worse, the oil supply has become volatile due to instabilities in the Middle East.
Amidst this situation, we have been able to secure oilfields in the UAE, the sixth largest country in terms of crude oil reserves. This achievement is a great stride on the path toward energy security.
During the past two years, the Government has put extensive efforts into participating in the project to develop three oilfields in the UAE. In March of last year when I visited the UAE, our two countries signed an initial contract on key conditions, and the final contract is now concluded.
The Middle East sits atop key oilfields with half of the world's oil reserves. However, in major Middle Eastern oil-producing countries like Saudi Arabia and Kuwait, the development of oilfields is under direct control of the government and foreign businesses have been completely prohibited from entering the market.
In the few countries where foreign companies are allowed to participate in the market, a handful of international powers have dominated the rights to develop the oilfields from the beginning. Since then, it has been practically impossible for other latecomers to advance into the market. Among them, the UAE is especially famous for high-quality crude oil and a stable investment environment, and thus has been a very difficult market to venture into. Since the United States, the United Kingdom and France edged their ways into the UAE in the 1930s and '40s, Japan was the only and last country to advance into the market, which it did in the 1970s.
After such a long time, about 40 years, Korea has obtained the right to develop oilfields in the Middle East, which has so far seemed to be beyond our reach. Now, Korea has become one of a select few oil developing nations.
Up until now, a relationship of trust with the UAE built on the basis of numerous rounds of summit diplomacy and other multilateral endeavors has served as a significant catalyst. Our country has finally set a milestone in its relatively short, 35-year history of resource development.
The size of two of the three oilfields to be developed is colossal, tantamount to one tenth of the total area of Abu Dhabi.
Since an MOU was signed two years ago, some have raised questions on the economic feasibility of the oilfield development. Experts have already confirmed the economic feasibility of the oilfields there. Yet, the Government was not able to provide elucidation on the questions raised, for we agreed with the UAE Government to keep the negotiations under tightest secrecy. It was also a strategy to evade possible checks by major oil companies of advanced nations.
Oilfields that are relatively easy to develop will be exploited first. It is projected that it will be possible to produce 43,000 barrels of oil a day in two years.
Currently, Korea is engaged in negotiations with the UAE to develop another oilfield. The nation has been given a priority right to participate in the development of a gigantic oilfield that could produce more than 1 billion barrels. Korea also participated in the bid in Iraq and obtained the right to drill oil wells in four fields. In addition, Korea has also secured the priority right to develop five oil exploration blocks in the Kurdish region in Iraq.
There is a chance that the signing of the contract with the UAE will lead to a second Middle East boom when the countries in the region are preparing for the post-oil era.
Korea is already working with the UAE in the construction of a nuclear power plant in that country. Last year, Korea sent 1,000 nuclear professionals there. A total of some 30,000 additional workers are expected to be needed over the years up to 2020.
Fellow Koreans,
Visiting around the world, I have found very few countries that have a greater lack of natural resources than does Korea. Unfortunately, Korea is very poor in natural resources and does not produce a drop of oil. Almost all our energy needs have been dependent on overseas suppliers. Korea is the fourth largest energy-importing and ninth largest energy-consuming nation.
As seen in Korea's dazzling economic miracle during the past half century, however, a lack of resources does not necessarily mean a lack of hope.
In recent years, the Government has exerted great endeavors to develop energy and obtain self-sufficiency. Consequently, during the past four years, the country was able to increase its self-sufficiency rate of petroleum and natural gas to 14 percent from the 4 percent range that had persisted for a long time. This year, the Government will try to boost the self-sufficiency rate up to 20 percent. This will be a level similar to Japan's, which will help substantially reduce the impact of any energy shock in times of crisis.
In order to put a firm energy security system in place, the Government plans to raise the energy self-sufficiency rate to 35 percent by 2020.
For the sake of sustained economic growth and energy security, the country needs to develop oil, natural gas and other mineral resources without fail. When the Government and the private sector work together diligently, future outcomes can be even greater.
Relevant industries should constantly meet the challenge of new opportunities, and I ask the general public to give them enthusiastic support. The Government on its part will continue to bolster its backing in this area.
Thank you very much.
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