The United Arab Emirates and South Korea signed a series of accords Saturday, including a memorandum of understanding on stockpiling Emirati oil in South Korea, on the second day of a visit by the South Korean president.
The MoU, whose terms have yet to be finalised, stipulates that South Korea will rent out facilities for stockpiling UAE crude oil, Mira Sun, a spokeswoman for President Roh Moo-Hyun, told AFP.
Roh, the first South Korean president to visit the UAE, arrived in Abu Dhabi Friday and will conclude his trip in Dubai, another of the UAE's seven members, on Sunday.
"For Korea, this is a win-win arrangement, because it will collect renting fees and will also have a prior guarantee for purchasing the stockpiled crude oil," Sun said.
The two sides signed a total of six MoUs, including one on energy co-operation, in addition to an agreement on economic, trade and technological co-operation, she said.
Once finalised, the stockpiling deal will give the UAE a marketing gateway to north-eastern Asia, one of the fastest growing markets for oil consumption, Sun said.
The MoU was inked by state-owned Korean National Oil Co (KNOC) and Abu Dhabi National Oil Company (ADNOC).
The UAE is South Korea's second largest crude oil supplier, with shipments totalling 150 million barrels in 2005. Shipments of liquefied petroleum gas reached 642,000 tons last year, making Abu Dhabi the third biggest supplier of LPG to Seoul.
The official Emirati news agency WAM said UAE Energy Minister Mohammad bin Dhaen al-Hamli, who met with Roh, "welcomed a Korean proposal for the UAE to store quantities of crude oil in South Korea's strategic reserves, bringing them close to major Asian consumption (markets)."
It quoted Hamli as saying Abu Dhabi would study the proposal and "take the appropriate decision in due course."
Oil from Norway, Algeria and China is already stockpiled in South Korea, Sun said.
Another MoU inked on Saturday provides for "building institutional foundations for bilateral co-operation" on energy matters and "preparing the framework for joint energy resource development," Sun said.
WAM said that under the MoU, the two countries will set up a joint committee that will examine possible joint ventures in the oil industry.
It quoted Hamli as telling Roh that Opec member UAE, which currently produces 2.7 million barrels of oil per day (bpd), is keen on ensuring sufficient oil supplies to the world market.
The current spike in world oil prices is due to "geopolitical developments in some producing regions" and not to a shortage in supplies, he told the South Korean president.
WAM said the accord on economic, trade and technological co-operation calls for encouraging joint ventures between the two countries as well as exchanging expertise and removing obstacles to trade.
Bilateral trade, which reached 12.7 billion dollars last year, was heavily tilted in favour of Abu Dhabi, whose exports to Seoul topped 10 billion dollars, according to WAM.
Other co-operation MoUs covered investments, small and medium size enterprises, plants construction and information technology, Sun said.
In addition to hailing progress in bilateral ties, Roh and UAE President Sheikh Khalifa bin Zayed al-Nahayan stressed during a meeting their opposition to "any terrorist acts" and their commitment to "participate in the global community's efforts to eliminate weapons of mass destruction," Sun said.