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Gov't to halt failing overseas projects by state-run energy firms

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(Globalpost/GlobalPost)

SEOUL, June 20 (Yonhap) -- The government will likely interrupt overseas energy development projects run by the country's public energy firms that are deemed to be failing and could further aggravate their debt-riddled balance sheets, an official said Thursday.

The move comes after Han Jin-hyun, a vice minister of trade, industry and energy, pointed to the problem of the public firms' growing debts.

"Public energy firms have been actively expanding into the area of overseas resources development, but the problem is that their debt ratio is growing too high," he had said in a meeting with reporters last month.

According to the official, the government has established a special task force to review the overseas projects of public energy firms.

In three rounds of meetings starting last month, the task force has come up with three main directions for overseas projects by public energy firms, the official said.

First, the public firms will be advised to abandon energy development projects that are showing no significant results.

They will also be encouraged to launch new exploration and development projects, apparently to maximize their returns, instead of focusing on acquiring proven assets through a merger or acquisition, a frequent practice under the former Lee Myung-bak administration.

Lastly, they will be encouraged to seek joint opportunities with private companies.

Such directions will be included in a more comprehensive government report on overseas energy development projects that will likely be published in August, according to the official.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130619/govt-halt-failing-overseas-projects-state-run-energy-firms