Gov`t to provide 289 bln won in loans for oil development projects

By Lee Joon-seung
SEOUL, Dec. 28 (Yonhap) -- The South Korean government said Sunday it will set
aside 289.8 billion won (US$224.5 million) to finance crude oil and gas
development projects in 2009.
The total is a decrease from the 349.5 billion won in loans earmarked for this
year, although more money will go to private oil and gas developers, the Ministry
of Knowledge Economy said.
Excluding the 20.8 billion won that will go into exploring South Korea's
continental shelf, 73 percent or 197.0 billion won will be offered as loans to
private companies, with the remaining 72.0 billion won to go to the Korea
National Oil Corp. (KNOC), which is wholly owned by the government, it said.
The KNOC is the sole developing authority for the country's continental shelf
that presently produces small amounts of oil and gas.
For this year, 51 percent or 180.3 billion won worth of loans went to private
companies, with 169.2 billion won provided to the KNOC.
The higher proportion of loans earmarked for the private sector reflects
complaints raised by energy developers who claim that more support is needed to
engage in more aggressive overseas energy development endeavors.
The ministry said loans will cover a minimum 45 percent of corporate costs in
exploration and development, with a maximum of 55 percent to be given depending
on the likelihood of success.
The ministry in charge of the government's industry and energy policies said
support for the KNOC will be gradually reduced until 2011, with no support to be
offered from 2012.
Of the projects that are to get loans, 32 are those already underway, while 24
are new endeavors.
South Korean energy and resource developers, meanwhile, requested 661.7 billion
won in state loan support in 2009 so they can engage in 57 projects in the new
year.
yonngong@yna.co.kr
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