South Korea Reviewing Overseas Oil, Gas Investments

South Korea is reviewing its overseas oil and gas investments due to poor profitability, particularly those made in the last five years, which could lead to asset sales to offset losses, industry and government sources told Reuters on Friday.

The National Assembly Budget Office in a statement on Wednesday revealed poor profitability in overseas investments by Korea National Oil Corp (KNOC), Korea Gas Corp (KOGAS) and Korea Resources Corp (KORES), Reuters said.

“We are reviewing what was invested in the past five years by state-run firms, and those in losses and low profits need restructuring...although that does not mean that we will sell immediately,” an energy ministry official said on Friday, Reuters added.

The statement said a net present value (NPV) calculation showed profitability of KNOC and KOGAS investments since 2008 were in poor shape and the non-listed KNOC was believed to have lost $1.8 billion in oil reserve development since 2008. South Korea has since reduced its overseas oil and gas investments by about 40 percent compared with annual investments in the past five years, Reuters said citing government data.