Kuwait is making a concerted effort to retain its importance as a reliable crude oil supplier to South Korea, where it has seen its market share dip as Korean refiners, spoilt for choice, have picked up more barrels from Iraq and Iran.
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A high-profile delegation led by Kuwaiti Prime Minister Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah and Deputy Prime Minister and Acting Oil Minister Anas Khalid Al Saleh is in Seoul this week where they met with several South Korean leaders, including President Park Geun-Hye and her energy minister, and chief of the country's biggest refiner, among others.
Kuwait has seen its market share in South Korea's total crude imports drop to 14% in Q1 2016 from 14.7% in Q1 2015 as Iraq has raised its share to 14.3% from 12.9% and Iran to 8.6% from 4.2% over the same period, data from state-run Korea National Oil Corp. showed.
Kuwait supplied 37.41 million barrels in Q1 2016, up 3.3% year on year.
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This compares with Iraq's 38.05 million barrels, up almost 20% year on year, and Iran's 22.85 million barrels, up nearly 123%.
"Middle East oil producers are striving to tighten relations with customers in the Asia-Pacific region, the biggest market for their crude," an official at the Korea Petroleum Association said Tuesday. "They are struggling to maintain their share in the South Korean market in the face of increasing shipments from Iran and Iraq," he said.
STRENGTHENS TIES WITH TOP REFINER
The Kuwaiti prime minister and oil minster on Tuesday met Chey Tae-Won, the chief of SK Group -- owner of the country's top refiner SK Innovation, which is South Korea's biggest importer of Kuwaiti crude.
"They discussed ways to boost cooperation in energy and infrastructure building," an official at SK Innovation said.
Also joining the meeting were the CEOs of SK Innovation and SK E&S, an LNG importer and power generator.
SK Group signed a memorandum of understanding with state-run Kuwait Petroleum Corp. that calls for close cooperation in the oil and gas sector.
"Under the MOU, SK Group and KPC are expected to push for joint efforts in areas such as crude oil exploration, petrochemicals and new energy sources," the SK Innovation official said.
The official declined to confirm if Chey and the Kuwaiti ministers discussed SK Innovation's crude import deals from Kuwait and the company's plans for upstream projects there.
Kuwait is SK Innovation's biggest crude supplier. The South Korean refiner imported 28.03 million barrels of crude from Kuwait in the first quarter of this year, which accounted for 39% of its total imports, according to a separate source in the company.
The 28.03 million barrels are significantly higher than the 10.85 million barrels it imported from its second biggest supplier Saudi Arabia.
SK Innovation and Kuwait have maintained strong ties since 2003 when Kuwait helped Chey defend his ownership in the company in the face of attacks by foreign investors.
During his stay in Seoul, the Kuwaiti oil minister Al-Saleh also held talks with Trade, Industry and Energy Minister Joo Hyung-Hwan Monday.
"The two ministers agreed to strengthen bilateral cooperation in the oil and gas sector," a ministry official said, without providing details.
--Charles Lee, firstname.lastname@example.org
--Edited by Mriganka Jaipuriyar, email@example.com; James Leech, firstname.lastname@example.org