State oil and gas company decides to sell stake in foreign assets

By Lim Chang-won Posted : March 11, 2019, 16:20 Updated : March 11, 2019, 16:20

[Courtesy of Korea National Oil Corporation]

SEOUL -- As part of corporate restructuring to reduce its debt, Korea National Oil Corporation (KNOC), a state oil and gas company, decided to sell off a stake in its investments in assets abroad this year.

KNOC will sell part of its stake in Dana Petroleum, a British oil and gas exploration and production company, and the Eagle Ford shale play in South Texas. Figures on KNOC's stake sale were given. 

The South Korean company acquired Dana in 2010 for $2.91 billion. There has been criticism that KNOC overpaid for the acquisition of Dana, which has exploration and production activities across the North Sea, the Middle East and West Africa. KNOC purchased a 24 percent stake in the U.S. shale play in 2011.

KNOC's debt-equity ratio has soared due to losses from its investments abroad. In 2018, the company reported an operating profit of 543 billion won, but its net loss stood at 1.16 trillion won ($1.02 billion).

Of KNOC's investment in the Iraqi Kurdish social overhead capital, some 635 billion won was determined to be unrecoverable. Together with the disposal of assets, KNOC has reduced its manpower and costs.

 
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