SEOUL, KOREA - Korea's state-run energy companies are withdrawing from overseas resource development projects in droves. Korea National Oil Corp. said on June 24 that it has passed a proposal in a board of directors meeting last month to terminate its exploration efforts in Kazakh and Uzbek oil fields. The state-run oil company will sell off its 42.5-percent stake in the the South Karpovsky field or liquidate the investment if the sale is not feasible.

 

The company also decided to pull out of the Aral Sea probe project in Uzbekistan after concluding there is a low possibility of producing a sufficient amount of oil to justify investment.

 

Meanwhile, Korea Gas Corp. has already returned or will return four exploration fields (A, B, C, and H) in East Timor deepwater oil drilling sites, after probing the fields through seismic surveys and experimental drilling.

 

Korea Southern Power Co. announced that it would move out of the wood pallet business in Canada, saying its profitability is not high enough. Earlier in March, Korea Resources Corp. had folded its project to explore copper, zinc, and nickel mines in Peru and Australia.

 

The reason state-run energy companies are extricating themselves from overseas projects has to do with the fact that the government, in cooperation with private sector experts, will soon form a task force and set out to investigate overseas resource investment projects for their efficiency and feasibility.