SEOUL (Reuters) – Iraq may suspend crude oil exports to South Korea if Korean companies proceed with a development project they received from the Kurdistan regional government, a South Korea energy ministry official said on Monday.
The Iraqi government has been angered by such deals, which it sees as usurping its authority.
The consortium led by state-run Korea National Oil Corp (KNOC) in early November secured exploration rights from the regional government for an oilfield in a Kurdish-controlled region of Iraq.
The group includes SK Energy, South Korea’s biggest oil refiner, and GS Holdings.
“The Iraq government recently warned about the possible suspension,” an official at the energy ministry said.
An official from the South Korean oil consortium said: “Iraq said last week there could be a problem or a delay in renewing contracts of crude oil”.
The Bazian oilfield in the Dahuk region of northern Iraq is estimated to have 500 million barrels of crude oil.
“It will hurt the country’s plan to secure oil if we give up the project,” said a South Korean energy ministry official.
Resource-poor South Korea, which has to import almost all its energy needs to feed Asia’s fourth-largest economy, is keen to develop and exploit oilfields.
Iraq accounted for 5.2 percent of South Korea’s total crude oil imports for the first 10 months in 2007, according to energy ministry.