Russian oil firm, N Korea in talks

GREASING RELATIONS: The CEO of Russian oil giant Gazprom met with top North Korean officials to seek a deal on building a pipeline to supply the South and Japan

AP , MOSCOW

Sun, Jan 23, 2005 - Page 11

The head of Russia's natural gas giant Gazprom has held top-level discussions with North Korea's prime minister and other oil and gas officials in the North Korean capital of Pyongyang, the company said Friday.

Gazprom did not say when CEO Alexei Miller and other company officials traveled to the North Korean capital or how long they were there. It said the parties had discussed cooperation in the oil and gas sector with Prime Minister Pak Pong Ju, Vice Premier for Industry Ro Tu Chol, and Oil Minister Ko Deng Sik.

No one answered the phones at Gazprom's press service Friday evening.

The Gazprom statement said that exploration work coordinated by North Korea's oil ministry in 1997 had located seven promising off and on-shore oil and gas fields. The Korean Corporation for Oil Extraction is the only oil and gas company in North Korea, with exclusive rights to explore and develop reserves.

Gazprom, the world's largest producer of natural gas, had been mulling various routes for pipeline options to supply South Korea and Japan with oil and gas, including a route through North Korea. Late last year, the Russian government announced that it would build the pipeline along a route favored by Japan.

Analysts, however, say the route is far from certain.

Alfa bank strategist Chris Weafer said Miller's visit appeared to be in line with President Vladimir Putin's stated intent of using Gazprom as a powerful geopolitical tool to forge new political alliances with Asia.

Russia wants to play a role in bringing North Korea into the world community, he said.

"But unlike America, which threatens military action, Russia comes bearing an economic olive leaf, which could take the form of a promise to use North Korea as a transit route for oil and gas to South Korea and on to Japan," he said.

Russia's ties with the communist North have improved after souring in the wake of the 1991 Soviet collapse and after Moscow established ties with South Korea in 1990.

Last August, a top Russian envoy said North Korea's reclusive leader Kim Jong Il intended to visit Russia again, nearly two years after he made his last trip amid a warming in relations between the Soviet-era allies. In 2002, Kim took a four-day rail tour across the Russian Far East, visiting factories and businesses and meeting with Putin. The previous year, Kim traveled across Russia and back in a specially outfitted train.

Gazprom controls some 10 percent of the world's gas reserves and the company has seen its role as state energy champion expand after the announcement of a pending merger with state-controlled oil company Rosneft last year.