In a surprising departure from its policy of economic self-reliance, North Korea has signed a preliminary agreement to allow foreign companies to explore for oil in its offshore territory.
A Singapore-based consulting company, Asia Exploration Consultants Ltd., has confirmed that it has signed a protocol with the state-operated Korea INdustrial Technology Corp. "regarding petroleum exploration and development offshore the People's Democratic Republic of Korea."
A statement was released by Ted Daniels, chief executive of the company, of Petroleum News Southeast Asia, a regional energy journal in Hong Kong. The statement said that "a final agreement is expected to be signed early in 1978."
Informed sources said the agreement would give Asia Exploration Consultants exclusive rights to organize a complete package of offshore exploration subcontractors for North Korea.
North Korea will allow the company to employ subcontractors of any nationality except U.S. or South Korean, the sources said.
The job could eventually involve scores of companies on tasks ranging from seismic surveys to oil rig operations. If oil is discovered in exploitable quantities, production platform and pipeline constructors would be needed.
There was no word on where exploration might begin, but one Singapore specialist suggested the Gulf of Chihi off Korea's west coast as a likely starting point. The site is near where the Chinese have found promising geological formations and are concentrating much of their search for oil.
The two Koreas, Japan, China and the Soviet Union dispute ownership of parts of the Sea of Japan, the Yellow Sea and the Gulf of Chihli.
North Korea recently declared an "economic zone" extending 200 miles off its shores.
Industry observers believe there is at present no significant production of oil in North Korea, and that the country's requirements are met by imports from China and the Soviet Union.
There was no immediate explanation for North Korea's decision to do business with multinational oil corporations, long cast as archvillains by many leftist ideologies.
Observers noted, however, that Moscow recently called on countries that import its oil to help finance the opening of new fields and pipelines in the Soviet Union. North Korea's move might be an effort to limit its dependence on Moscow.
Another theory is that the Koreans have decided to follow the example of neighboring China, which is going all out to produce more oil ro fuel the economy as a whole. Given the relatively backward state of offshore technology in Communist bloc countries, North Korea would have no alternative but to import know-how and equipment from the west.
If the agreement is completed, North Korea will become the thrid Communist country in Asia to co-operate with western oil compaines.
China currently is making major pruposes of western exploration and development equipment.
Peking insists that Chinese operate all equipment, and does not allow foreign companies to participate in the process of exploration or development.