A Mongolian oil company with ties to North Korea is planning to entice foreign investors to the country’s energy sector by showing them geological data which could indicate the presence of oil and gas resources.
The move could mark the first step towards opening up the DPRK to onshore oil exploration and comes amid declining relations with China, it’s primary fuel supplier.
While there have been some modest attempts to explore North Korea’s onshore potential in the past, very little is currently known about the DPRK’s geology and potential oil and gas reserves.
To address this, HBOil JSC is planning on opening what is known in the industry as a data room – a place where interested parties can inspect geological information on underground structures that could indicate the presence of oil and gas fields.
With the DPRK government and military entirely dependent on Chinese and Russian fuel imports, domestic oil and gas production could afford Pyongyang a greater measure of independence from Beijing and Moscow.
Currently, the DPRK lacks a domestic oil industry, meaning that oil and gas exploration could prove difficult even with foreign capital and expertise. Finding oil and gas fields often involves a multi-pronged effort with seismic, drilling and other service companies cooperating.
Since crude oil needs to be refined once extracted, it remains unclear what companies operating in North Korea would do should they discover oil. The DPRK has two ageing refineries in Seungri and Bongwha, but both need upgrading.
This article has been extracted from http://www.theguardian.com, please click on this link to read the article in full http://www.theguardian.com/world/2014/jul/01/north-korea-oil-gas-exploration
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