SEOUL, Industry Minister Ahn Duk-geun said Monday the government needs to take a "prudent approach" in attracting foreign investment for the development of potential oil and gas reserves off the East Sea, and revamp related policies to brace for the project. Ahn made the remark during a meeting with reporters in the central city of Sejong, as South Korea embarked on the project that could potentially uncover between 3.5 billion and 14 billion barrels of gas and oil in the East Sea. "Attracting foreign investment is crucial, and we intend to take a strategic and prudent approach," Ahn said. "If commercial development begins, we will need an astronomical amount of funds. Therefore, we need major players from overseas to finance it," Ahn said, noting that the country needs help from foreign companies in terms of technology as well. Kim Dong-sub, head of the state-run Korea National Oil Corp. (KNOC), recently hinted that major oil companies have expressed interest in participating in the project, including t hose from the Middle East, without elaborating on details. The minister added that the country needs to revamp its policies and redefine the deep-sea blocks in the East Sea to reflect the discovery. "Currently, the country's related policies do not take such major resource development into consideration. If we carry out development under current terms, we may give unilateral benefits to foreign investors," Ahn said, highlighting the importance of promptly updating the rules. South Korea, meanwhile, plans to start the first drilling operation in December after choosing the site next month. If confirmed, the quantity would be sufficient to meet the country's gas demand for up to 29 years and its oil demand for four years. Costs, however, have been one of the major hurdles for the country's unprecedented development project, as drilling a hole is estimated to cost around 100 billion won (US$72.4 million) to 130 billion won. "The government will provide necessary financial support, and the KNOC will also mak e its best efforts to prepare funds," Ahn said, adding that the government will seek cooperation with the National Assembly as well. The country has found seven potential locations for oil and gas reserves, with an estimated success rate of around 20 percent, meaning 1 out of every 5 holes drilled would be successful. Industry sources, meanwhile, said the government and KNOC plan to hold a meeting with experts on Friday to discuss strategies for the project and various agenda items surrounding the development, including attracting foreign investment. Source: Yonhap News Agency
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