Korea's intense hunt for oil fuels price hikes
Posted
May 29 2008, 03:26 AM
by
Jon Markman
Rating:
As crude oil prices continue to cause anxiety, the debate over demand tends to focus on energy usage in the United States, Europe and China. But there’s a big world full of other countries that need raw materials to keep economies humming -- and their intense rivalry is a key factor between soaring prices.
Consider the news from Asia Intelligence that Prime Minister Han Seung-soo of South Korea embarked on a 10-day tour of Central Asia this month that took him to Uzbekistan, Kazakhstan, Turkmenistan, and Azerbaijan in search of oil, uranium and ores. It's called resource diplomacy, but it's more like a resource-grabbing smackdown -- and you can bet it's partly to blame for the scorching ascent of energy futures prices this month.
The prime minister’s office said in a press release that it considered Central Asia “the second Middle East,” and his visit was intended to “increase the regional awareness of South Korea and help build comprehensive and mutually beneficial cooperative ties with those countries."
In other words, Han wanted to make sure that those key countries between China and Russia don’t forget that South Korea exists, and should be entitled to as many resources as can be spared. Han signed a long-term contract in Uzbekistan for the purchase of 2,600 tons of uranium, then moved on to Kazakhstan for a two-day visit focused on securing access to the Zhambyl oilfield in the Caspian Sea. He then went to Turkmenistan for his country’s first official state visit, and then pushed on to Azerbaijan to talk about joint energy and mineral resource developments. On the sidelines, Korean companies signed contracts with Azerbaijani officials to build railroads, shipyards and other social and industrial infrastructure.
If you stop to think about it a moment, this is an extremely critical moment in history for small but ambitious countries like South Korea that have few energy resource but huge economies. They have to figure out ways not just to pay for higher oil and gas prices, but also must be cunning enough to persuade producing countries not to just do deals with companies from stronger, bigger, richer countries like the United States and China. That’s just got to keep people like Han up at night, as well as make us aware that higher prices are a result of real desperate industrial competition, and not just speculation.
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