Sunday, September 22, 2019
Public Energy Corporations Concerned over Low International Oil Prices
57 Trillion Investment
Public Energy Corporations Concerned over Low International Oil Prices
  • By Cho Jin-young
  • December 2, 2014, 06:50
Share articles

The Korea National Oil Corporation is the national oil and gas company of South Korea, operating oil and gas fields in Vietnam, Libya, Peru, Indonesia, Nigeria, Yemen, Kazakhstan, Russia, Canada, and South Korea.
The Korea National Oil Corporation is the national oil and gas company of South Korea, operating oil and gas fields in Vietnam, Libya, Peru, Indonesia, Nigeria, Yemen, Kazakhstan, Russia, Canada, and South Korea.

 

The Korea Gas Corporation (KOGAS), Korea National Oil Corporation (KNOC), Korea Resources Corporation (KRC), Korea Electric Power Corporation (KEPCO), and its subsidiary power generation companies have invested a total of 57.3 trillion won (US$51.8 billion) in overseas resource development projects between 2008 and June 2014.

Forty point eight trillion won (US$36.9 billion) of it was invested after the inauguration of the current government, while 16.5 trillion won (US$14.9 billion) was invested before than that. Twenty-two trillion won (US$19.9 billion) has been recovered from the latter. The KNOC invested 15.8 trillion won (US$14.3 billion) under the current government, while the amounts reached 8.7 trillion won (US$7.9 billion) for KOGAS, 2.4 trillion won (US$2.2 billion) for the KRC, and 1.5 trillion won (US$1.4 billion) for KEPCO and its subsidiaries.

The KNOC invested in 27 projects in Canada, the United States, Peru, Great Britain, Uzbekistan, Iraq, the United Arab Emirates, Columbia, Kazakhstan, and others. The idea was to join EP Energy’s and Eagle Ford’s shale gas development projects to provide against a change in the international energy market. KOGAS participated in 20 projects for the same purpose in Uzbekistan, Myanmar, Iraq, Canada, Australia, Indonesia, and Mexico. The KRC took part in 21, including bituminous coal, nickel, and uranium development projects in Australia; copper development projects in the United States, Mexico, and Peru; rare earth metals in China; lithium in Chile; and bituminous coal in South Africa.

Under the circumstances, these corporations are expected to earn less-than-expected profits from such massive projects, as OPEC recently decided not to reduce the petroleum supply. If the low international oil prices continue, the shale gas of the corporations becomes relatively higher, along with those of mineral resources. It has already been pointed out that OPEC would maintain low petroleum prices in order to tackle the United States’ shale gas development.

At present, KOGAS imports most of its overseas resources to Korea, while the KNOC is focusing on local sales. The KRC is engaged in both. In the meantime, these corporations are maintaining that their resources development projects should be considered with a long term perspective, instead of being criticized for the short-term rate of return, and as an effort for achieving the great cause of energy self-sufficiency.