This document analyzes the Look Asia Project from Korea and Colombia's perspectives. It discusses rising oil consumption in Asia compared to other regions through 2035. It also examines Korea's need to diversify its oil imports away from the Middle East and Colombia's interest in exporting more oil to growing Asian markets like Korea, China and India. The document outlines advantages and challenges of the project for both Korea and Colombia.

1. Look Asia Project
January 2012

2. Analysis
Oil Consumption - World and Asia
Oil Production - World and Asia
Oil Refinery
Crude Oil Export Direction Shift – Colombia
Necessity of The Project from Korea’s Standpoint
Necessity of The Project from Colombia’s
Standpoint
Outlook for Colombia’s Oil to Access Asian
Market

3. Oil Consumption - World and Asia
 World oil consumption and production - 85m b/d (’08) projected to rise to 112m b/d (‘35) –
increase of 31%↑
 Changing ratio of oil consumption by region between 2008 and 2035
 Asia (25%→43%), N. America (24%→27%), Europe (21%→21%)
 China occupies 10% of world oil consumption (’08) but is projected to rise 15% (’35)
 India projected to have highest annual growth rate of 3.5% of any country (up 1% world)
Prospects of Oil Consumption of Asia (’08-’35) (m b/d)
Consumption of Oil by
Region in 2025 Growth
2008 2015 2025 2035
Rate(%)
N. America 7.8 12.1 15.6 16.9 2.9%
Asia China
(3.8) (8.1) (10.8) (11.6) (4.2%)
25.8% Japan 5.0 4.3 4.7 4.5 -0.4%
38.5%
Korea 2.1 2.3 2.4 2.6 0.7%
3.0 3.8 5.7 7.5 3.5%
20.0% India
Europe (2.1) (2.8) (4.6) (6.4) (4.2%)
Total 13 17.5 22.5 25.1 0.01%
Source : IEA (International Energy Outlook, 2011) * ( ) indicates the volume of oil imports
Look Asia Project 3

4. Oil Production - World
 Oil production by region projected in 2035 - OPEC (47%), N. America and Europe (each
21%)
 Highest annual growth rate in Mid. America is projected to rise by 2.9% (1% for the world)
 Estimated growth rate by Vector Error Correction Model (VECM) employing macro historical
data
 Korea (2.08%), China (4.3%), Japan (-1.7%), India (3.7%), USA (-1.2%)
Projection of Oil Production by region (2008-2035) (m b/d) Oil Consumption Trends
Annual 16000
2008 2015 2035 growth 14000 China
rate(%)
12000
OPEC 35.6 38.6 46.9 1.0%
10000
N. America 15.0 16.7 21.1 1.3% USA
8000
Europe 17.8 18.4 21.0 1.1% 6000 India
Asia 8.7 8.6 9.3 0% 4000 Korea
Mid. America 7.4 9.1 12.5 2.9% 2000
Japan
Others 1.2 1.9 1.2 0% 0
Total World 85.7 93.3 111.2 1%
Source : IEA (International Energy Outlook, 2011)
Look Asia Project 4

5. Oil Refinery
 Ecopetrol of Colombia owns 5 refinery facilities, Barrancabermeja refinery is the biggest
producing 250,000 b/d
 Refinery capacity is 296,000 b/d - refined oil was 291,000 b/d in 2010 (utility ratio is 87%)
 The capacity over oil consumption is 99% in 2010 and 127% in 2015
 Therefore additional oil refinery facility is not required
 It is planned to expand refinery capacity
 Barrancabermeja from 205,000b/d in 2012 →250,000 until 2013
 Cartagena from 80,000b/d to 165,000b/d
(Unit: thousand b/d)
2008 2009 2010 2011 2012f 2013f 2014f 2015f
Oil
Consumption
288 279 296 300 307 315 324 331
Refinery
capacity
291 291 291 291 336 421 421 421
Source: Ecopetrol, BMI

6. Crude Oil Export Direction Shift - Colombia
 Shift in export direction from USA to Asia driven by
 Stagnant oil consumption in USA and increasing US imports from Canada
 Rapid growth of oil consumption in Asia (Korea, China and India)
 Evidence of shift since 2008
 Exports ratio 2008 (USA: 81%, Asia:1%) vs 2010 (USA: 74%, Asia: 9.3%)
USA
Annual growth
rate of 2008 - 2035 0.4%
consumption
2008 81%
Asia Exports ratio of
2010 74%
Colombia’s oil
2035 ?
Columbia
Korea+China+Japan+India
Annual growth
rate of 2008 - 2035 2.1%
consumption
2008 1%
Exports ratio of
2010 9.3%
Colombia’s oil
Look Asia Project
2035 ? 6

7. Outlook for Colombia’s Oil to Access Asian Market
 Predicted that oil production increase from 786,000 b/d (2010) to 1,000,000 b/d (2015)
 Identified oil reserves 6.7 billion barrels in Llanos and Putumayo basins
 Possible production of oil 980,000 b/d (2012)
 Plan to construct Pacific Pipeline
• 1,400km from Llanos basin to Tumaco port
• Pipeline capacity 450,000 b/d
2010 2012 2015 2020 2025 2030
NE Asian Imports 1,355.4 1,511.4 1,773.0 2,081.0 2,329.9 2,597.6
Increasing Rate 156 417.6 725.6 974.5 1,242.2
Share (%) 28.8 10.8 6.2 4.6 3.6
Unit : 10,000 b/d

8. Necessity of The Project from Korea’s Standpoint
 Korea, is ranked 5th in the world importation of oil and necessary to engage in
exploration overseas
• Too high dependency of oil imports from Middle East (82%) → Need to diversify
• Policy for an oil hub of East Asia with favorable ports and oil reserves facilities
• Perception of Korean Gov’t on overseas oil development → Strong policy drive of
the Gov’t
 Advantage of oil hub in East Asia(China,  Lack of investment experience in South
Japan and India) America
 Appropriate oil logistics  Expensive transport cost due to long
infrastructure(storage facility and ports) distance
 Know-how of overseas infrastructure S W
construction)
O T
 High growth of oil demand in East Asia  Large-scale overseas’ oil development of
 Need for oil imports diversification China
 Increasing interest of Colombia in oil  Continuous instability of socio-politics of
exports to Asia South America
Diversification of Oil Imports and Development of Overseas’ Oil

9. Necessity of The Project from Colombia’s Standpoint
 Colombia ranked 4th in South America in terms of oil production
• Abundant oil reserves (1.9 billion barrels) only 20% of total territory explored
• Pursuing strong policy for oil industry as a core industry with high growth rate
• Growing interest in in exporting oil to Asia market due to decline in oil exports to USA
 High economic growth rate (6% since 2009)  Unstable domestic security
 Abundant oil resource (1.9 billion barrels)  Delay in project process due to complicated
 Strong policy for oil industry assessment
 Growing interest in exporting to Asian market  Demand of Consortium with local companies
 Difficulties in financing
S W
O T
 Expanded investment in infrastructure due to  Intermittent guerrilla attacks on oil infrastructure
political stability  Frequent earthquakes in Andes mountains
 Abundant investment capital due to increasing
infra funds
Infrastructure Establishment for Diversifying Exports Countries