TOKYO, June 18 (KUNA) -- Japan and South Korea signed an oil sharing agreement Monday to better cope with unexpected emergency situations resulting from the global supply of crude oil, Seoul's media reported.
The Strategic Alliance Agreement (SAA) gives South Korea and Japan priority access to stored oil held by the other country in case there is a shortfall in their national reserves, the South Korean Ministry of Commerce, Industry and Energy said, according to Yonhap News Agency. The new measures could help stabilize global prices that could be affected if either South Korea or Japan reported a drop in their strategic reserves.
"The move follows steady rise in oil prices this year and concerns that it may rise further in the coming months that could disrupt economic growth of both countries," a South Korean ministry official was quoted as saying.
As of 2005, Japan ranked second with daily imports topping 5.1 million barrels, while South Korea was the fifth largest importer of crude oil in the world bringing in roughly 2.3 million barrels of oil per day. The largest importer in that year was the US.
The agreement is a follow up to the memorandum of understanding (MoU) signed between the state-run Korea National Oil Corp. and Japan Oil, Gas, Metals National Corporation in December 2004.
Unlike the earlier MoU, the SAA calls for annual meetings to coordinate policies between the oil companies, exchange information on oil reserves and share technical information, it said. The two companies will also conduct joint research on the long-term storage of crude oil and support joint training exercises. (end)
KUNA 181840 Jun 07NNNN