South Korea, the world's fourth-biggest oil buyer, signed a major energy deal with resource-rich Kazakhstan on Monday as part of Seoul's plan to diversify its energy sources.
South Korea imports 2 million to 2.5 million barrels per day (bpd) of crude to run its economy, the world's 11th biggest, and support an export market led by such global brands as Samsung Electronics, LG Electronics and Hyundai Motor.
President Roh Moo-hyun stopped in Astana for a state visit before heading later on Monday to Russia, where South Korea's energy needs are also expected to be a key topic, along with North Korea and its nuclear ambitions.
South Korea, Asia's third-largest economy, imports all its crude oil and natural gas and is keen to diversify supplies away from the oil-rich but volatile Middle East to others including Russia and Kazakhstan.
"With the deal, we came to establish a bridgehead to secure oil from the oil-rich Caspian Sea," said a Roh aide by telephone from Astana.
"We hope this deal will help us improve our self-sufficiency of energy," the aide said after state-run Korea National Oil Corp (KNOC) signed a memorandum of understanding with Kazakhstan's state oil firm KazMunaiGas.
The aide gave no value for the upstream oil project, but said it aimed to develop between 600 million and 800 million barrels of oil. Kazakhstan currently produces more than 1 million bpd of crude and condensate.
KNOC led a consortium which included South Korea's top oil refiner SK Corp, Samsung Corp, LG International Corp and Daesung Industrial Co Ltd, Korea's energy ministry said.
KNOC also obtained the preferred rights from KazMunaiGas for talks to buy a stake in the onshore Tenge oil block in the south-west of the Central Asian country, it said.
A KNOC official in Seoul said KazMunaiGas was offering all of its 69 percent holding in the block, but declined to elaborate.
A diplomatic source in Moscow said in addition to the Kazakh deal, one for a $2.6 billion petrochemical plant in Russia's Tatarstan region would be agreed in Moscow.
South Korea's Korea Resources Corp signed a memorandum of understanding with Kazakhstan's state KazAtomProm on a separate uranium development project that is expected to produce 1,000 tonnes of uranium annually for 30 years.
Seoul, which wants uranium from Kazakhstan and Russia for the 19 nuclear plants that supply 40 percent of its electricity, hopes the scheme will meet about 10 percent of its uranium needs.
Roh's four-day trip is the first in a series of profile-raising visits that will take him to a dozen countries by the end of the year.
After arriving in Astana on Sunday, Roh met members of Kazakhstan's 100,000-strong ethnic Korean community, descendants of those Josef Stalin deported from the Soviet Far East to Central Asia in 1937. Koreans first emigrated to Russia's Far East 140 years ago.
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