The South Korean government has decided to lower its crude oil dependence on specific regions to below 50 percent by 2035 and expand its stockpiling facilities.

Drawing lessons from the Middle East conflicts, the plan aims to diversify crude oil supply routes and expand stockpiled volumes.

Along with these measures, the management list for critical minerals used in semiconductors and batteries will be expanded to 51 types, and the stockpiling period will be extended up to 365 days.

The Ministry of Trade, Industry and Energy held the 6th Resource Security Council today (the 23rd) at the Trade Insurance Corporation, chaired by Minister Kim Jeong-kwan, where it deliberated and finalized four agenda items, including the 1st Resource Security Basic Plan containing these measures.

The Basic Plan on Resource Security is the first pan-governmental mid- to long-term resource security plan formulated since the National Resource Security Special Act took effect in February of last year.

The government set "establishing a resource security preparedness posture that remains unshaken even during crises" as its core direction, and decided to ease dependence on crude oil from specific regions to 50 percent or lower by 2035.

This means managing dependence on Middle Eastern crude oil, which stood at around 70 percent as of last year, below a certain level.

A target has also been set to lower gas dependence on any single country to the 30 percent range.

South Korea's gas dependence on Qatar reached 35.5 percent in 2016, but through subsequent efforts to diversify import sources, it has now dropped below 20 percent.

In addition, the government presented the success of 10 major mineral strategic projects and the securing of new industrial resources as key goals.

To achieve this, the government plans to establish a stable supply and demand structure by diversifying import routes, contract methods, and oil types for crude oil and natural gas.

It decided to expand support for diversification, such as increasing subsidies for freight cost differences on non-Middle Eastern crude oil—currently at the 25 percent level—providing differentiated support based on diversified crude oil import performance, and offering customs administration convenience.

For gas, the plan is to continuously pursue diversification by comprehensively considering supply stability, production volumes, and strategic cooperative relations.

Import methods and facilities will also be diversified.

For crude oil, the government will expand import methods from spot purchase-centered diversification to long-term contracts, and support the securing of long-term contract volumes through cooperation with producer governments.

Overseas development will pursue stable resource imports through limited equity investments and the conclusion of import contracts, while domestic development will proceed based on the principle of private sector participation.

The government plans to build multi-crude processing capabilities through facility investment support and research and development (R&D) support for refining technology advancement, enabling domestic refining facilities optimized for Middle Eastern heavy oil to be converted to handle light oil such as US crude.

In addition, it plans to expand 20 million barrels of stockpiling facilities by 2030 to increase government oil reserves and international joint stockpiling volumes, while additionally securing condensates to support stable domestic production of naphtha.

South Korea's daily oil consumption is approximately 2.8 million barrels, including export volumes, meaning that 20 million barrels equates to roughly 7 days' worth.

Supply chain management for critical minerals will also be strengthened.

The government will newly designate 13 items—including germanium, phosphorus, fluorite, and 10 types of rare earths—as critical minerals, expanding the management scope from the existing 38 types to 51.

Furthermore, it plans to increase stockpiled items from 24 to 29 types and raise the stockpiling target for supply chain-vulnerable mineral groups from 180 days to up to 365 days, differentially managing supply and demand risks for each mineral type.

Minister Kim Jeong-kwan stated, "Experiencing the Middle East conflicts, we have once again confirmed that resource security is not merely a cost issue, but a matter of national survival that protects people's livelihoods and industries." He added, "Moving away from short-term and ex-post responses that repeatedly occurred during every crisis, we will fundamentally improve the constitution of our resource supply chain."

(Photo: Yonhap News)