Korea Merges State-Owned Energy Companies to Boost Efficiency

The Korean government has announced plans to merge two state-owned energy companies, Korea National Oil Corporation (KNOC) and Korea Gas Corporation. The move aims to strengthen efficiency and improve the financial structure by integrating their similar functions in oil and gas sectors.

As of last year, KNOC had debts exceeding its capital by 2.529 trillion won, while Korea Gas Corporation has more capital than debt. The government believes that the integration will enable them to increase their international bargaining power with oil-producing countries and global energy companies through 'economy of scale'.

The new company, Integrated Energy Resources Corporation, will have four main functions: energy integrated development, energy stockpiling, clean energy, and energy supply and demand and security strategies.