KNOC ‘seeks $2.9bn funding’

Employees of Korea National Oil Corp are seen reflected on the company's commute bus as they walk across a parking lot at KNOC's headquarters in Anyang24 October 2013, News Wires – Korea National Oil Corporation, KNOC, is to seek a large amount of financing from the local market in order to finance overseas acquisitions, according to a report.

The state-run company is looking to raise 3.1 trillion Korean won ($2.92 billion) from local investors, including the National Pension Service, Reuters cited chief executive Suh Moon-kyu as telling a congressional hearing on Thursday.

KNOC is to offer investors stakes in existing overseas assets and use the resultant cash to chase further acquisitions, the news wire said.

South Korea is reviewing its overseas investments in oil and gas, particularly those made in the last five years. In July, South Korea’s National Assembly Budget Office revealed poor profitability in overseas investments by KNOC, Korea Gas Corporation (Kogas) and Korea Resources (Kores).

Asia’s fourth-largest economy is heavily dependent on energy imports and rapidly expanded overseas investments to develop oil and gas reserves between 2008 and 2012, as it grappled with inflation driven by costlier imports.

South Korea is the world’s fifth-largest crude oil importer and second-largest LNG buyer.

Kogas is reportedly considering selling up to half of its stake in a Canadian liquefied natural gas project.

The state-run player is mulling the sale of a 5% to 10% stake in the project in which it is already a 20% stakeholder along with Anglo-Dutch supermajor Shell, Japan’s Mitsubishi Corporation and PetroChina.

Kogas is also reportedly considering the sale of part of its 15% holding in the Gladstone LNG (GLNG) project in Queensland, Australia.

Kogas took the stake in the project in 2010 after it signed a 20-year offtake agreement with project operator, Santos.

The GLNG project is a two-train scheme that will export 7.8 million tonnes per annum of LNG with first exports expected in 2015.

KNOC acquired US Ankor Energy in the Gulf of Mexico in 2008, Canada’s largest energy company Harvest Operations in 2009 and Dana Petroleum in the UK in 2010.

Kogas acquisitions in the past five years include the stake in the Gladstone LNG project of Australia, a project in Surgil, Uzbekistan and Iraq’s Zubair project.

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