Peace deal could boost N. Korea
June 13, 2018 -- The Donald Trump-Kim Jong-un summit has raised hopes of a relaxation of sanctions on North Korea, allowing imports of much-needed fuel from South Korean refiners and exports of its rich mineral deposits.
The United Nations Security Council resolution 2397 -- aimed at forcing Pyongyang back to the negotiating table -- capped refined petroleum exports to North Korea at 500,000 barrels annually. It also capped crude oil supplies at 4 million barrels a year.
Pyongyang operates just two refineries, according to S&P Global Platts. Pongwha Chemical Factory, located near the north-western border with China has a capacity of 30,000 barrels per day (b/d) and receives some 10,000b/d of crude from China’s Daqing oil field through an underground pipeline. Sungri Chemical Factory, near the north-eastern border with Russia, has a capacity of 40,000b/d. Sungri is 20% owned by Mongolia’s HBOil JSC.
If the peace talks are successful, they could revive plans to build a Russian gas pipeline, with a capacity of up to 10 billion cubic metres per year via North Korea to the south of the peninsula. The project between Russia's Gazprom and state-owned South Korean Gas Corp., or Kogas, was first agreed in 2008 but shelved in 2012.
In 2004, Irish-Anglo oil and gas company, Aminex, announced that the Donghanman Basin in the East Sea could hold up to five billion barrels of crude oil. The following year, China’s National Offshore Oil Corporation (CNOOC) reported that the Sohanman Basin, in the Yellow Sea has crude oil reserves of about 60 billion barrels.
In addition to black gold, the nation’s mountains contain vast mineral reserves, including iron, gold, magnesite, zinc, copper, limestone, molybdenum, graphite, and possibly the world’s most significant deposits of rare earth elements needed to make smartphones and other high-tech products. Estimates of the value’s of North Korea’s mineral resources have varied between $6 trillion and $10 trillion.