Russia, South Korea sign major oil and gas deals

RUSSIA: Russia and South Korea signed major agreements Monday on deliveries of natural gas and on joint exploration of the huge west Kamachatka oil field.

Russian gas giant Gazprom and the Korea Gas Corporation signed the deal on gas deliveries at a Kremlin ceremony attended by Russian President Dmitry Medvedev and South Korean counterpart Lee Myung-Bak.

Gazprom did not immediately release details about the agreement, but South Korea’s Yonhap news agency valued it at more than 100 billion dollars (68 billion euros), citing the Asian country’s government.

“Under the deal signed by Korea Gas Corporation and Gazprom, 10 billion cubic metres of natural gas will be imported every year for 30 years,” South Korean Deputy Energy Minister Lee Jae-hoon was quoted as saying.

He told Yonhap the gas would be delivered via pipeline through North Korea, adding that Russia would negotiate with Pyongyang on the construction of the pipelines.

Russia and South Korea also agreed to let Korean firms take part in joint exploration for oil in Russia, including at a major field near the Kamchatka Peninsula that the Korea National Oil Corp (KNOC) was kicked out of last month.

“We agreed to cooperate in joint exploration of the Kamchatka shelf,” South Korean President Lee Myung-Bak said at the Kremlin press conference.

Last month KNOC said the Russian government had declined to extend a licence granted to a consortium led by KNOC and Russian oil firm Rosneft to explore and develop west Kamchatka, believed to hold up to 3.7 billion barrels of oil.

Moscow, Tuesday, AFP