Korea oil and gas companies shift investment focus
() - Korea National Oil Corp. said it aims to raise $2.9 billion by 2017 from local investors, including the National Pension Service, to help fund its future overseas acquisitions. The state-run oil company's chief executive, Suh Moon-kyu, told a congressional hearing Oct. 24 that KNOC will make efforts "to secure the funding as the firm's investment resource."
The proposal marks a change of tack for South Korea's state-run oil and gas firms, which have faced criticism from the government after running up debt in an overseas spending spree in recent years and are under pressure to sell underperforming assets to bolster their finances. Under the plan, KNOC would offer local investors a stake in its overseas assets, raising money for the company to invest in promising energy projects.
Korea imports almost all of its oil and gas. It rapidly expanded investments between 2008 and 2012 to boost oil and gas supplies from its overseas reserves in a bid to curb costlier imports. However, its investment policy has changed with a change of government. Energy Minister Yoon Sang-jick said in April that Seoul would focus more on investment quality rather than quantity. KNOC and state-owned Korea Gas Corp. plan to slim down their portfolios and focus on upstream exploration and production.