South Korean President Park Geun-hye told a visiting U.S.
delegation of lawmakers on the House of Representatives energy
committee on Aug. 11 that tapping into the gusher of ultra-light,
sweet crude emerging from places like Texas and North Dakota was a
priority, the lawmakers said.
One of South Korea's leading refiners has opened discussions with
the government in Seoul over how to encourage Washington to open the
taps, three sources in South Korea with direct knowledge of the
matter told Reuters.
Mexico is also eagerly awaiting word from the U.S. Department of
Commerce on possible shipments and the EU wants U.S. oil and natural
gas exports covered by a proposed trade agreement with Washington,
the Transatlantic Trade and Investment Partnership.
Joe Barton, Republican Representative from Texas and one of the
lawmakers who met Park, told Reuters that lifting the ban would
boost the U.S. economy, but also provide allies with a reliable
energy trading partner.
"I'm in favor of overturning the ban on crude oil exports," he said.
The South Korea talks, which have not previously been reported, are
an indication of how swiftly pressure on the Obama administration to
relax the ban on oil exports has broadened, and also how it is
increasingly being questioned in the context of oft-touted
free-trade agreements (FTAs).
In a meeting with Republican U.S. Representatives Barton, Marsha
Blackburn of Tennessee, and Leonard Lance of New Jersey, President
Park said she hoped for Congress's help in "allowing U.S. condensate
exports to FTA partner South Korea" and developing shale gas
reserves, according to a statement from the presidential office. She
did not specify what kind of involvement in developing shale gas she
White House officials declined to comment on whether the Obama
administration has had talks with South Korea or other countries on
However, Energy Secretary Ernest Moniz said during his trip to Seoul
in May that his South Korean counterparts brought up the subject.
In Mexico, which is thirsty for oil as its own reserves decline,
state oil company PEMEX said on Thursday that it could enter an
agreements with the United States on crude oil swaps or on direct
Jose Manuel Carrera, CEO of PMI Comercio Internacional, the trading
arm of state-owned oil company Petroleos Mexicanos, told Reuters his
company has been talking with government officials and potential
sellers about starting oil shipments.
In Japan, the government is carefully monitoring oil production in
the United States, and is interested only if the supplies are
economically feasible, according to a Japanese government official
familiar with the matter. Tokyo is not currently asking to ease the
Meanwhile, U.S. oil drillers such as Continental Resources are
stepping up their own campaign to loosen - or better yet eliminate
-- a ban imposed after the Arab oil embargo of the 1970s, which they
argue is now obsolete.
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In the midst of a shale revolution, the United States is soon
expected to surpass both Russia and Saudi Arabia as the world's
largest producer. While fully overturning the ban would require
Congressional action that most consider unlikely in the near-term,
many argue that Obama could gradually allow for more oil to flow
abroad through existing means.
New supplies would be welcome in South Korea, which relies on
imports to cover 97 percent of its energy needs and has been
pressured to curb purchases from OPEC member Iran -- once one of its
primary suppliers -- due to U.S. and EU sanctions introduced in
"Depending on one source too much raises risks," said James Kim,
research fellow at the Asan Institute for Policy Studies think tank
in Seoul. "If we have various sources to import crude including the
United States, it will help reduce price fluctuations."
U.S. condensate supplies are plentiful in part because they differ
from the type of crude U.S. refineries have been configured to
In March, the U.S. Department of Commerce approved exports from two
domestic companies, Pioneer Natural Resources and Enterprise Product
Partners, of lightly processed condensate. A first cargo of 500,000
barrels was loaded in Texas City, Texas at the end of July and is
expected to reach South Korea on Sept. 10.
But since the Commerce Department's decision became public in June,
at least three further applications have been put on hold as the
Obama administration sorts out policy on the ban.
The Bureau of Industry and Security at the Department of Commerce,
in charge of granting the approvals, had no comment on the
Congressional delegation's talks.
Early this year the parties pressing for change were limited mainly
to lawmakers from energy-rich states led by Senator Lisa Murkowski,
a Republican from Alaska, and by U.S. oil producers.
European countries have also pushed for U.S. energy exports as an
alternative to supplies from Russia where President Vladimir Putin
has shown he can restrict natural gas supplies.
(Reporting by Valerie Volcovici, Timothy Gardner and Meeyoung Cho
with additional reporting by Osamu Tsukimori and David Alire Garcia.
Writing by Timothy Gardner; Editing by Jonathan Leff, Jessica
Resnick-Ault and Tomasz Janowski)
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