(2nd LD) Seoul, Baghdad agree on $3.55 billion deal to rebuild Iraq

(ATTN: RECASTS lead paras to clarify; UPDATES with additional details, remarks from
presidential spokesman)
By Byun Duk-kun
SEOUL, Feb. 24 (Yonhap) -- South Korea on Tuesday signed a US$3.55-billion deal
with Iraq to help rebuild the war-torn nation and set up various forms of social
infrastructure in exchange for nearly 2 billion barrels of Iraqi oil, Seoul's
presidential office Cheong Wa Dae said.
The deal was signed by South Korean President Lee Myung-bak and visiting Iraqi
President Jalal Talabani.
"With this agreement, our side can now acquire rights to develop oil reserves in
Iraq's Basra region, where most Iraqi oil is produced," the presidential office
said in a press release.
In return, Seoul will help build social infrastructure, such as power plants, it
said.
"This, of course, is not a small deal because it entitles us to over two billion
barrels of oil, which will be enough to supply the entire nation for nearly the
next three years," Lee Dong-kwan, a spokesman for the office, told reporters.
South Korea imports about 870 million barrels of oil ever year.
Tuesday's deal will mean the oil is immediately available to South Korea, whereas
in agreements with other countries South Korea has to first help develop oil
reserves.
The Basra region is said to account for some 70 percent all oil production in
Iraq, the world's third largest producer.
South Korea's offer is only a small portion of some $150 billion expected to be
needed over the next eight years to rehabilitate Iraq, but Seoul expressed hope
more South Korean businesses will be able to take part in various projects to
rebuild the Middle East nation.
"President Lee also requested that South Korean businesses be allowed to take
part in Iraq's $550-million project to buy new generators and in designing a new
oil refinery, worth $84 million," the presidential office said.
Talabani called for strengthening of the Korea-Iraq relationship while also
thanking Lee for Seoul's contribution so far to help his nation.
"Especially, President Talabani noted the important role played by South Korea's
Zaytun unit to establish peace in Iraq and rebuild the country and expressed the
gratitude of the Iraqi government for the Zaytun unit," Cheong Wa Dae said.
Speaking at a separate meeting with business representatives at a hotel here, the
Iraqi president repeated his hope that more South Korean firms will take part in
the reconstruction of his country.
"We have a plenty of natural resources. I hope that many South Korean companies
will contribute to rebuilding Iraq," Talabani said at a meeting hosted by the
Korea Chamber of Commerce and Industry (KCCI).
Sohn Kyung-shik, chairman of the KCCI, welcomed the invitation, noting South
Korean firms have carried out large-scale construction projects in Middle Eastern
countries for over 40 years and that such experience will be very "helpful."
Meanwhile, a $31-million deal was also signed Tuesday between Seoul's Incheon
Airport Corporation and Iraq's Kurdistan Regional Government to provide the
Korean airport's operating systems to the Iraqi region where the Zaytun was
deployed from 2004 to late last year.
"The deal marks the first case in which our know-how in operating an
international airport is exported," the Cheong Wa Dae said.
The Iraqi president is currently on a four-day visit here that began Monday,
accompanied by some 60 government officials and business representatives.
Talabani is the first Iraqi president to make a state visit to Korea since the
two countries established diplomatic relations in 1989.
bdk@yna.co.kr
ksnam@yna.co.kr
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