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Potential for Energy Cooperation between Korea and Azerbaijan
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Transcript of Potential for Energy Cooperation between Korea and Azerbaijan
Potential for Energy Cooperation between Korea and Azerbaijan
Baku, Azerbaijan
August 27, 2007
Dr. Sung-Kyu, LeeResearch Fellow
Korea Energy Economics Institute
I. Energy Profiles in Korea
II. Potential for Energy Cooperation
III. Strengthening Energy
Cooperation
Contents
I. Energy Profiles in Korea
Korea Ranks in the World
RankEnergy Consumption
(Million Toe)Oil Consumption(Thousand b/d)
LNG Import(Billion cubic
meter)
1st US2,337
US20,655
JAPAN76.32
2nd CHINA1,554
CHINA6,988
KOREA 30.45
3rd RUSSIA679
JAPAN5,360
SPAIN21.85
4th JAPAN524
RUSSIA2,753
US17.87
5th INDIA387
GERMANY2,586
FRANCE12.83
6th GERMANY324
INDIA2,485
TAIWAN9.61
7th KOREA (10)224
KOREA2,308
INDIA6.04
■ Korea as a big energy importer - High oil dependency, rapidly growing natural gas consumption - 5th largest oil importer, 2nd largest LNG and coal importer
■ Energy Consumption Growth for 2005-2020: 2.5%
Source: BP(2006)
Economic Growth and Energy Demand Increase
Major Energy-Economic Indicators in Korea
Indicator 1981 1990 1995 2006
Avg. Annual Growth Rate (%)
‘81-’90 ‘81-‘06 ‘90-‘06
Primary Energy Consumption
(mill. toe)45.7 93.2 150.4 231.5 8.2 6.7 5.9
Per Capita Energy Consumption (toe)
1.18 2.17 3.34 4.77 7.0 5.7 5.0
Energy/GDP(toe/mill. won)
0.31 0.29 0.32 0.31 -0.7 0.0 0.4
GDP (2000 constant, tril. won)
147.5 320.7 467.1 757.6 9.0 6.8 5.5
Population (mill.) 38.7 42.9 45.1 48.5 1.2 0.91 0.77
Primary Energy Consumption by Source
Trend in Consumption Shares (198119902006, %)
• Oil : 58.1 53.8 43.8 • Coal : 33.3 26.2 24.4
• LNG : 0 3.2 13.3 • Nuclear : 1.6 14.2 16.1
Trend in Consumption Shares (198119902006, %)
• Oil : 58.1 53.8 43.8 • Coal : 33.3 26.2 24.4
• LNG : 0 3.2 13.3 • Nuclear : 1.6 14.2 16.1
Coal24.4%
Petroleum43.8%
LNG13.3%
Hydro0.6%
Nuclear16.1%
Firewood & Others1.8%
2006231.5 mill. toe
Final Energy Consumption by Sector
Trend in Consumption Shares (198119902006, %)
• Industrial : 44.948.155.4 • Rsd./Cmrcl. : 40.729.321.2
• Transport : 9.618.921.1 • Public/Other : 4.83.72.3
Trend in Consumption Shares (198119902006, %)
• Industrial : 44.948.155.4 • Rsd./Cmrcl. : 40.729.321.2
• Transport : 9.618.921.1 • Public/Other : 4.83.72.3
2006173.4 mill. toe
Bill. US $
Overseas Energy Dependency
Energy Imports in Detail
Imports (2006)
• Crude Oil : US $ 55.9 billion (888.4 million barrels) - Saudi Arabia, UAE, Kuwait, Iran, Qatar, …
• LNG : US $ 11.9 billion (24.3 million tons) - Indonesia, Qatar, Oman, Malaysia, Brunei, …
• Coal : US $ 5.3 billion (76.0 million tons) - Australia, China, Indonesia, Russia, Canada, …
Imports (2006)
• Crude Oil : US $ 55.9 billion (888.4 million barrels) - Saudi Arabia, UAE, Kuwait, Iran, Qatar, …
• LNG : US $ 11.9 billion (24.3 million tons) - Indonesia, Qatar, Oman, Malaysia, Brunei, …
• Coal : US $ 5.3 billion (76.0 million tons) - Australia, China, Indonesia, Russia, Canada, …
Major Feature (2006)
• Import Dependency: 96.8%
• Energy Imports: US $ 85.6 billion
• Petroleum Dependence: 43.8%
• ME Oil Dependency: 82.2%
Major Feature (2006)
• Import Dependency: 96.8%
• Energy Imports: US $ 85.6 billion
• Petroleum Dependence: 43.8%
• ME Oil Dependency: 82.2%
II. Potential for Energy Cooperation
Future Energy Challenges in Korea
■ High Natural Gas Demand Drivers
• Changes in consumer preference to cleaner and more convenient fuel
• Establishment of nation-wide gas network
• Environmental regulations to encourage the use of natural gas
• Increased use of natural gas in the power generating sector with increased electricity demand
■ Continuous Increases in Oil demand
• Oil demand is projected to grow by 2.4% per annum, 2005~2020
• Oil dependency will decrease
… 50.6% in 2001 44 % in 2005 38 % in 2020
• Oil will remain to be a major fuel due to the increased demand in the transportation and industry sectors
(Unit: %)
261.4 mtoe293.9 mtoe
330.7 mtoe
229.3 mtoe
2.216.013.1
23.9
44.3
3.116.9
12.8
24.9
42.3
3.619.5
15.0
22.3
39.5
4.320.2
15.2
22.3
38.0
2005 2010 2015 2020
Oil
Coal
LNG
Nuclear
RE & Others
Energy Outlook in Korea
Final Energy Consumption by Sector ( 2005 2020, %) • Industrial : 55.2 54.4 • Residential : 14.1 12.7 • Transport : 20.6 21.4 • Commercial : 7.9 11.4
Final Energy Consumption by Sector ( 2005 2020, %) • Industrial : 55.2 54.4 • Residential : 14.1 12.7 • Transport : 20.6 21.4 • Commercial : 7.9 11.4
TPES by Source (%) : 3.7 % p.a.
• Oil & Coal decrease, while LNG & Nuclear increase • Oil remains as the dominant fuel until 2020 & beyond
TPES by Source (%) : 3.7 % p.a.
• Oil & Coal decrease, while LNG & Nuclear increase • Oil remains as the dominant fuel until 2020 & beyond
Energy Policy of Korean Government■ Positive Governmental Support to Energy Resources Development
Companies
• Support to exploration and development company
• Induce private company to overseas resource development business
• Training Expert
• Financing Energy Investment
■ Promotion of Bilateral Energy/Mineral Resources Cooperation with Resource-endowed Countries
• Energy/Resources Summit Talk
• Establishment of Inter-governmental cooperative channel
: Energy and Mineral Resources Cooperation Committee
■ Strengthen Energy Supply Security
• Diversification of energy resources and import sources
East SiberiaWest SiberiaCentral
Asia
Middle East
North Sea
S&Cent. America
West Africa East Asia
North America
new development regionstagnant/increasing production regiondecreasing production region
Movement of Oil Development Region
Overseas Projects of KNOC
Energy Policy of Korean Government
■ Strengthening Strategic Cooperation • Development of a close cooperative relationship with Azerbaijan
• Participation in exploration and development of energy fields
: oil, gas, coal, mineral resources
• Security of supply of energy and diversify import sources
: abundant resources, huge export potential of oil and gas
: oil and gas transportation hub in Caspian region
: friendly investment environment for foreign company
• Economic Benefits
: spill-over effects
: effective development of resources throughout technology transfer and foreign investment
Potential for Oil Export
Source: EIA(2006)
Oil and Gas Fields In Caspian region
III. Strengthening Energy
Cooperation
Energy Cooperation Strategy
■ Comprehensive Cooperation
• In energy/resource, plant and construction, manufacturing industry, and service sectors
• In governmental, commercial, and research levels
: officials meeting, expert forum, business forum
• Cooperation can provide a win-win opportunity for both countries
: lots of potential opportunities for cooperation on energy and energy-related business
■ Strengthening Inter-governmental Cooperation
• Energy trade requires stable political relationships
• Improve investment environment
: Establishment of investment-friendly environment
: Reduce investment risks
: Inter-governmental supporting scheme for Investment promotion and protection
Energy Cooperation Strategy
■ Creation of Successful Business in Energy Sector
• Policy commitment by both governments
: concerted efforts
: confidence Building
: accumulation of cooperation experience
• Provide significant momentum to energy development and further economic cooperation
: availability of additional projects in offshore and onshore regions
: development and extension of cooperation projects in industry sectors
Energy Cooperation Strategy■ Establishment of Working Groups
• Expert groups in several sector
• Collaborative research and activities
: specify feasible joint projects and actualize them
: execute joint studies and activities(seminars, symposia, conferences, workshop)
• Inter-governmental management and support
■ Exchange Visit of Experts of both countries
• Promote human resources development
• Enhance closer cooperation
• Capacity building and information exchange
: exchange program for training and educational courses
• Governmental, commercial, and research sector interchange
• Establishment cooperation network
Thank you very much