DEVELOPMENTS IN NORTH KOREAN PETROLEUM INDUSTRY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001900010009-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 19, 2016
• Document Release Date: May 16, 2006
• Sequence Number: 9
• Publication Date: November 21, 1973
• Content Type: MEMO

 Approved Fob
21 Nov. m'-,-~r ].~73
CIA Control No. 7875
S ?:: E:;T s Developments in North Korean
Petroleum Industry
1. Attached is the inforriation you requested on
develo;tents in the Nox`th Korean petroleum industry.
Any furthar cuestions should be addressed to
Chief, Rots Branch
China Division, OEP.
Attachment
A/S
Distribution:
(S-5649)
Orig & 1 - Addressee
1 -
D/OER
1 -
SA/ER
1 -
St/CS
1 -
St/P/C
1 -
D/C
2 -
C/RE
CER/C/REI 1(21 Nov 73)
Approved For Release 2006/09/26 : CIA-RDP85T00875R001900010009-8
Release 2006/09/26 : CIA-RDP85T00875 001900010009-8
 Approved For Release 2006/09/26 : CIA-RDP85T00875R001900010009-8
North Rocca 1Potrol'ium D-)vulonmontu
Recent Davolopmanta
1. Prior, to 1973 North Korean needs for petroleum
products ware mat almost excluuivoly by imports. Pro-
duction at the small synthetic petroleum facility at
the Aoji Coalfiold (an estimated 20,000 tons annually)
has never boon a significant component of total supply.
Events have occurred this year to change the nature of
North Korea's petroleum dependency. in mid-1973 an oil
refinery constructed by the Soviets began operation at
Unggi, in the far northeastern corner of the country.
At full capacity it will process 2 million tons of crude
oil annually, approximately twice current domestic needs.
As production at Unggi grows, the composition of North
Korea's petroleum imports will change drastically:
whereas imports in the past have consisted solely of
petroleum products,* in future years petroleum imports
will consist almost entirely of crude oil. Crude
for Unggi must be imported since North Korea produces
no natural crude oil. Reports of oil discoveries in the
Pyongyang area remain unsubstantiated. Shipments of
crude oil to North Korea in 1973 have come both from the
Soviet Union and from China.
2. Despite the fact that Unggi's annual output
will exceed domestic needs for the next few years, the
North Koreans since 1970 have approached firms in
several countries (Prance, Iraq, Japan, and Italy)
about the construction of a second refinery and a
petrochemical complex to be located in the Pyongyang
area. Thus far no firm has shown serious interest,
but a reported early 1973 visit to Pyongyang by Italian
petroleum industry representatives may be the harbinger
of farther, more substantive negotiations.
*. Very small quantities of crude oil may have been
imported for use as boiler fuel.
Approved For Release 2006/09/26 : CIA-RDP85T00875R001900010009-8
 Approved For Rele
Imports
3. 11iotoric.-illy the principal source of petroleum
products for North Korea has boon the Soviet Union.
In 1971 it is ootimatod that of appro:cimatoly 1 million
tons of petroleum imports, perhaps 850-900,000 tons were
from the USSR. As production at Unggi approaches full
capacity, the North Koreans are likely to import
increasing amounts of crude oil from China (especially)
and the Middle East (perhaps Iraq), with imports from
the Soviet Union increasing only slightly, or perho ps
even declining. In the relatively near future the
North Koreans should be producing most of the petroleum
products which they consume. They will remain highly
dependent upon other countries for crude oil supplies
and select high-technology petroleum products which
they themselves are unable to manufacture.
4. For an appreciation of the changes that are
taking place, a brief history of North Korean consumption
(and therefore of imports) of petroleum is useful.
The volume of petroleum imports from the USSR averaged
about 415,000 tons annually during 1964-67. In 1968
petroleum imports from the Soviet Union jumped to 714,000
tons, almost 601~ higher than the 448,000 tons imported in
1967. This sharp rise probably was accounted for by a
significant increase in aircraft inventory, but increased
consumption in the civilian sector and the allocation of
larger quantities of petroleum to storage were also significant
factors. By 1971, imports from the USSR were an estimated
850-900,000 tons, compared to 770,000 and 840,000 tons
in 1969 and 1970, respectively. No data are available
for 1972.
5. Imports of petroleum normally have moved by rail
from the USSR to North Korea. In earlier years most oil
imports came via Manchouli through China to North Korea.
By 1966, however, the bulk of the rail shipments probably
moved over the single rail line that connects the USSR
directly with northeastern North Korea. In the latter
part of 1968, the Soviets began to move some petroleum
from Soviet Far East ports to North Korea on small
Soviet tankers: these shipments amounted to about 1,500
tons in 1968; A,000 tons in 1969; 40,000 tons in 1970;
and 15-20,000 tons in 1971. Most, if not all of these
deliveries have been to the port of Nampo, on the west
Approved For Rel
 . . Approved For Rel
ccast. Thu use of tan}:ors to move petroleum imports
from the US5t? in boliovad to be an effort to roliovo
some of the burden on rail facilities.
6. In 1970 North Korea made its first large purchases
of petroleum products from the Free World, largely India
and Kuwait: previous imports had consisted of occasional
small quantities of lubricating oils. Approximately
86,000 tons of petroleum products were imported from
Free World countries in 1970; in 1971 imports were
approximately 60,000 tons. Those imports probably are
motivated primarily by a desire to diversify sources
of supply and to expand North Korea's influence in the
international community. Petroleum product imports from
Free World countries and the USSR probably declined
in 1972, as China expanded its exports to North Korea
f rota approximately 45,000 tons in 1971 to approximately
200,000 tons the following year. It appears that a
large share of North Korea's crude oil (and thus total
petroleum) imports, for the next few years at least,
will com,'% from China.
Approved For Rele
 Approved For
Fro
m:
USSR
Other
Total
1967
448,000
Negligible
448,000
1968
714,000
Neg.
714,000
1969
770,000
Neg.
770,000
1970
840,000
115,0)0
955,000
1971
900,000
100,000
1,000,000
1972
Not available
N.A.
N.A.
00010;009-8
North Korea Imports of Petroleum Products
(Metric tons)
Approved Fo