With no domestic oil reserves, South Korea must import all of its crude oil. Oil makes up the largest share of South Korea's total energy consumption, though its share has been declining in recent years. According to the 2008 BP Statistical Energy Survey, South Korea consumed an average of 2371.46 thousand barrels a day of oil in 2007, 2.72% of the world total and a change from 2006 of 53.65 tbpd. South Korea is the fifth largest net importer of oil in the world.
South Korea's total reliance on oil imports has led to a policy of securing and diversifying the country's oil supply. South Korea has both a short-term and a long-term approach to fulfilling its oil needs. In the short-term, it has developed a strategic petroleum reserve, which is managed by the state-owned Korea National Oil Corporation (KNOC). Strategic stocks are roughly equivalent to a 90-day supply. The period of "import cover" was expanded from 60 days in early 2001, in part to meet the requirements for entry into the IEA. This reserve serves as a safety net against supply disruptions.
According to the 2008 BP Statistical Energy Survey, South Korea had a 2007 refinery capacity of 2667.6 thousand barrels a day, 3.03% of the world total.
In 1998, KNOC discovered South Korea’s first natural gas deposits at the offshore Donghae-1 field, which holds proven reserves of 250 Bcf. The company began producing natural gas from the field in 2004, and average production in 2005 stood at 50 million cubic feet per day (MMcf/d). South Korea is the second largest importer of natural gas in the world behind Japan. According to the 2008 BP Statistical Energy Survey, South Korea had 2007 natural gas consumption of 36.97 billion cubic metres, 1.26% of the world total. The Korea Gas Corporation (KOGAS) is the sole importer and distributor of natural gas in South Korea and the largest purchaser of LNG in the world.
