S. Korea fails to secure resources despite huge overseas investment

The South Korean government has invested nearly 36 trillion won ($31.5 billion) into overseas resources development projects in the past 20 years but failed to secure an acceptable amount of resources, the state audit agency said Tuesday.

"The government has invested 35.8 trillion won to participate in 169 overseas energy projects since 1984 to secure energy resources. However, the outcome was not good enough," the Board of Audit and Inspection of Korea said in a press release.

The BAI's outcome said an additional 46.6 trillion won also needs to be pumped into overseas projects pursued by three state-run firms -- Korea National Oil Corp., Korea Gas Corp. and Korea Resources Corp. -- although the prospects of such deals are questionable.

"We doubt why the government has launched overseas projects," Jeong Gil-young, a senior BAI auditor, told a press briefing.

Noticeably, the state-run Korea National Oil Corp. has secured only 0.2 percent of the total amount of imported oil annually in the past 13 years, according to the BAI.

The BAI also noted that 40 overseas resources projects, which need more investments in the future, have 12.8 trillion won in losses, an increase from 9.7 trillion won anticipated between 2008 and 20014.

The BAI's inspection, which started in March, covers government bodies and state-run firms, including the Ministry of Strategy and Finance; the Ministry of Trade, Industry and Energy; and state-run firms that led overseas energy projects under the former Lee Myung-bak administration.

The focus of the inspection was put on assessing the performance of energy deals under the Lee administration, as well as how loss-making deals could be restructured rather than committing irregularities, according to the state agency. (Yonhap)