Babylon
09-18-2011, 04:09 AM
Failed oil project
09-18-2011 17:44
More caution needed in overseas resources business
``Haste makes waste” has been heard frequently in Korea’s unsuccessful history of overseas resource development projects. The Lee Myung-bak administration seems to have just added to the list.
An oil project in Kurdish northern Iraq, into which the Korea National Oil Corp. (KNOC) poured about $400 million, has proved not feasible economically, according to a report submitted to the National Assembly recently.
It is all the more shocking the project has been heralded as the first and most successful overseas oil exploration deal made by this government. In February 2008, the then President-elect Lee met the prime minister of Kurdish autonomous government to fix the deal, which KNOC boasted secured 1.9 billion barrels of oil.
Now that the oil wells have proved near empty, Korea has been dealt triple damage ― the loss of $400 million, the reported pullback by the Kurdish side in compensation and earning the ire of the Iraqi central government because of the hurried, direct deal with the local government.
Knowledge Economy Ministry officials say it is too early to conclude the project as a failure, also denying Kurdish infringement on a compensation pledge. Yet it only deepens popular suspicion on how the arguments of the government and the state-run oil developer can differ so widely.
No less disturbing is the possibility that Cheong Wa Dae and the government have hushed up this fiasco, until a ruling party lawmaker happened to demand KNOC submit the related report.
Overseas oil development is necessary for resource-poor Korea, and failure may be inevitable considering the success rate of about 30 percent. But the process should be transparent.
The Board of Audit and Inspection should conduct a probe into the possibility that political hastiness and technological amateurism are behind this and other resources development projects. Officials, elected or appointed, must be held accountable for throwing away taxpayers’ money.
http://www.koreatimes.co.kr/www/news/opinon/2011/09/137_94980.html
09-18-2011 17:44
More caution needed in overseas resources business
``Haste makes waste” has been heard frequently in Korea’s unsuccessful history of overseas resource development projects. The Lee Myung-bak administration seems to have just added to the list.
An oil project in Kurdish northern Iraq, into which the Korea National Oil Corp. (KNOC) poured about $400 million, has proved not feasible economically, according to a report submitted to the National Assembly recently.
It is all the more shocking the project has been heralded as the first and most successful overseas oil exploration deal made by this government. In February 2008, the then President-elect Lee met the prime minister of Kurdish autonomous government to fix the deal, which KNOC boasted secured 1.9 billion barrels of oil.
Now that the oil wells have proved near empty, Korea has been dealt triple damage ― the loss of $400 million, the reported pullback by the Kurdish side in compensation and earning the ire of the Iraqi central government because of the hurried, direct deal with the local government.
Knowledge Economy Ministry officials say it is too early to conclude the project as a failure, also denying Kurdish infringement on a compensation pledge. Yet it only deepens popular suspicion on how the arguments of the government and the state-run oil developer can differ so widely.
No less disturbing is the possibility that Cheong Wa Dae and the government have hushed up this fiasco, until a ruling party lawmaker happened to demand KNOC submit the related report.
Overseas oil development is necessary for resource-poor Korea, and failure may be inevitable considering the success rate of about 30 percent. But the process should be transparent.
The Board of Audit and Inspection should conduct a probe into the possibility that political hastiness and technological amateurism are behind this and other resources development projects. Officials, elected or appointed, must be held accountable for throwing away taxpayers’ money.
http://www.koreatimes.co.kr/www/news/opinon/2011/09/137_94980.html