SEOUL, April 3 (Korea Bizwire) — Three South Korean state-run energy companies have suffered billions of dollars in losses from overseas resources development projects since 2003, the state audit agency said Friday.
The outcome by the Board of Audit and Inspection of Korea (BAI) comes as prosecutors are probing several local firms for alleged embezzlement and misuse of state energy funds during the former Lee Myung-bak administration.
The companies, Korea National Oil Corp., Korea Gas Corp. and Korea Resources Corp., have invested a total of 31.4 trillion won (US$28.7 billion) since 2003 in energy projects abroad, the Board of Audit and Inspection of Korea (BAI) said.
Those projects, however, resulted in a confirmed net loss of 3.4 trillion won so far and further losses are expected down the road, the audit agency said.
According to the terms of the foreign energy deals forged by the three state firms, another 34 trillion won should also be pumped into their overseas projects although the prospects of such deals are questionable.
The investment skyrocketed to 27 trillion won under the Lee administration, which pitched for its signature “energy diplomacy,” compared with 3.3 trillion won during its predecessor Roh Moo-hyun government.
The state gas agency has put in 35.4 million won for an energy project in Iraq’s Akkas gas field, with nearly 3 trillion won to be further funneled into the deal down the road.
But the project had its operations suspended after a militant Islamic group occupied the region in a local conflict.