Overseas Liabilities
According to ruling Saenuri Party lawmaker Jun Ha-jin, who is a member of the Trade, Industry & Energy Committee of the National Assembly, the Korea National Oil Corporation (KNOC) invested a total of US$11.229 billion in six petroleum development companies between 2008 and June this year, but succeeded in recovering only 22 percent of the investment during the period.
The six companies are Ankor in the United States (acquired in 2008), Savia Peru (2009), Harvest in Canada (2009), KNOC Caspian in Kazakhstan (2009), Dana in Britain (2010), and Altius in Kazakhstan (2011).
At the end of last year, the KNOC recorded an overall investment recovery ratio of 42 percent abroad, which implies poor investment results with regards to the six subsidiaries. In particular, it recovered merely 0.1 percent of its investment in Harvest until the end of June 2015, although it invested no less than US$3.844 billion in the company. The total investment in Savia Peru reached US$651 million, but only US$5 million was recovered.
“The KNOC will have to come up with drastic measures in order to improve the business of the acquired subsidiaries,” said the lawmaker, adding, “Examples of the measures can include slimming down through business unit integration, capital expenditure adjustment, and personnel restructuring.”