Gov't considers broad restructuring of energy sector

SEOUL, Oct. 24 (Yonhap) -- The government is considering fundamental
restructuring of South Korea's energy sector in the mid term to enhance
industrial efficiency and bolster national competitiveness, a senior policymaker
said Friday.
Knowledge Economy Minister Lee Youn-ho told lawmakers at a parliamentary audit
session that changes will extend to public companies such as Korea Electric Power
Corp. (KEPCO), Korea National Oil Corp. (KNOC) and Korea Coal Corp.
"The overall structure will remain intact but measures are to be implemented to
ensure improvements in the way companies are run," the official said.
The minister, who has already said that KEPCO will not be privatized under the
incumbent Lee Myung-bak administration, said efforts are underway to extensively
streamline operations of the power service provider.
"The actions planned will be commensurate with measures if the power company was
sold off to the private sector," he claimed.
KEPCO said that losses incurred by skyrocketing fuel prices during the year will
require electricity prices to be raised 15 percent, even if 670 billion won in
state subsidies are used. Bailout measures for the company, which is partly owned
by foreign investors, have drawn fire.
On measures designed to increase the size of the KNOC, Lee said 19 trillion won
(US$13.2 billion) will be injected up till 2012.
The money is to be used to hire more technicians and increase oil production
capabilities, as well as strengthen overseas operations that will push up the
country's self-sufficiency in oil and gas to 40 percent in 2030, from 3.2 percent
at present. South Korean companies have started to buy stakes into and engaged in
joint exploration and development projects that ensure a certain proportion of
production if oil or gas is found.
The top official in charge of the country's energy and industrial policy then
said in the case of the coal corporation, which is struggling to cope with 1
trillion won in debt, Seoul is considering measures to phase it out.
The statement reflects speculation that the public coal corporation will be
merged with the Korea Resources Corp.
Lee, who previously worked for the Federation of Korean Industries, a lobbying
group of large businesses, added that recent drops in stock prices and sharp
fluctuations of the Korean won against the U.S. dollar could not be attributed
solely to a drop in market trust for the present administration.
"The challenges being faced are the result of global developments," he said.
yonngong@yna.co.kr