Feb. 2 (Bloomberg) -- South Korea, which imports almost all of its oil needs, reduced the amount it plans to lend energy developers to support investments in crude and natural gas fields to 156 billion won ($139 million) this year.
The allocation is 30 percent less than last year after lawmakers cut the government budget for energy and resource development in 2012 by a third to 200 billion won, Kim Seung Tae, deputy director at the Ministry of Knowledge Economy, said at a seminar today in Seoul. The remaining 44 billion won will be lent to resource developers, he said.
The loans will carry lower interest rates and principal payments will be waived if exploration efforts fail, he said.
South Korea plans to increase investments by 34 percent to $11.8 billion in 2012 to develop overseas oil and gas fields as it seeks to reduce reliance on energy imports. Investments by South Korean companies in overseas energy assets almost tripled to $6.45 billion in 2010 from $2.23 billion in 2007, according to government data, while the state’s funding support ratio declined to 3 percent from 17 percent in the period.
South Korea plans to own crude and gas assets capable of producing 20 percent of its overall energy consumption this year, compared with an estimated 13.8 percent in 2011, according to data from the ministry.
--Editors: John Chacko, Indranil Ghosh
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