KRG Ministry of Natural Resources

KRG Statement on Article in the Korea Times

12 March 2015

The Kurdistan Regional Government completely rejects the false and malicious allegations of misuse of funds made against the KRG and the Minister of Natural Resources by an opposition MP in the Republic of South Korea and which were published by the Korea Times.

The Korea Times allegations have also been spread by some politically motivated local media and politicians to undermine the Ministry of Natural Resources and the minister.

In comments to the Korea Times on March 9, MP Chun Soon-ok of the main opposition party in South Korea, made a series of claims about payments in December 2008 by the Korean National Oil Corporation (KNOC) as part of its contractual commitments to the KRG regarding its production sharing contract (PSC) to explore for oil in the Bazian block in Kurdistan.

It is unfortunate that an opposition MP in Korea has chosen to drag the good name of the KRG and its officials into what appears to be an internally politicised matter in South Korea.

Had the Korean MP, or the Korea Times, or those local media and politicians who repeated the libellous claims, conducted a minimum amount of research before making their claims, they would have discovered that all payments in question were legal and have been fully accounted for and documented by the KRG.

The PSC for the Bazian block (and all other contracts entered into between KRG and KNOC) which include KNOC’s signature bonus and capacity building obligations, are publicly available on the KRG website, published years ago (please note that the contract file takes some minutes to open).

The Korean MP has claimed that $31.4 million dollars paid by KNOC to the KRG has gone missing. In fact in 2008, KNOC paid a total of $235,500,000 (which included the $31.4 million amount referred to by the Korean MP) to the KRG as part of its contractual obligations under the PSCs.

This money was paid into the KRG’s account in HSBC in London. This money and the whole amount referred to above is fully accounted for in the KRG’s accounts, and has been spent by the KRG in the normal course of government business.

Details of all payments made to the KRG by KNOC in 2008 are listed in the attached table.  

The KRG has been advised in a letter from the president of KNOC that it will pursue legal action against both the Korea Times and the MP (see attached letter).

The KRG will demand a full, immediate and unreserved apology from the Korean MP in question and the Korea Times, and it reserves its right to take legal action against them in South Korea.

The KRG also advises any persons or media organizations that attempt to cause mischief by repeating these false and malicious claims in public without including the KRG’s full denial, will also make themselves liable to legal action by the KRG.

The KRG will pursue legal action against those media outlets and individuals who have irresponsibly spread the unfounded allegations. These media and individuals are requested to immediately remove this damaging material and related comments from public view.