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State-run Korea Electric Power Corp., the nation’s biggest utility company, is expected to streamline its overseas energy development business by selling its stakes in money-losing projects, industry sources said.
This likelihood of KEPCO’s portfolio restructuring was included in a report from the Ministry of Strategy and Finance, which is responsible for the reform of public enterprises.
Entitled “Guidelines for Public Enterprises’ Investment in Overseas Energy Development Projects,’’ the ministry called on the utility giant to basically exit from money-losing overseas development projects by 2016 and focus on its core businesses ― power generation and distribution through its six affiliates and electricity sales.
To meet the guidelines, sources predicted that KEPCO is likely to sell off most of its stakes in the 10 overseas energy development projects it is conducting. Another option is to transfer some of the projects to its power generation affiliates that include Korea Hydro Nuclear Power.
As of this November, the company was found to be running five coal mining projects, including the Bylong coal mine project in Australia and five uranium mining plans.
In Australia, however, industry watchers said it is likely to hold on to a 51 percent stake in the Bylong project as it is still in the initial exploration stages. KEPCO acquired a 100 percent stake in the mine in 2010 for $340 million.
Both the ministry and KEPCO officials said the ministry’s guidelines are not binding and that further details need to be fixed.
By Seo Jee-yeon (jyseo@heraldcorp.com)
This likelihood of KEPCO’s portfolio restructuring was included in a report from the Ministry of Strategy and Finance, which is responsible for the reform of public enterprises.
Entitled “Guidelines for Public Enterprises’ Investment in Overseas Energy Development Projects,’’ the ministry called on the utility giant to basically exit from money-losing overseas development projects by 2016 and focus on its core businesses ― power generation and distribution through its six affiliates and electricity sales.
To meet the guidelines, sources predicted that KEPCO is likely to sell off most of its stakes in the 10 overseas energy development projects it is conducting. Another option is to transfer some of the projects to its power generation affiliates that include Korea Hydro Nuclear Power.
As of this November, the company was found to be running five coal mining projects, including the Bylong coal mine project in Australia and five uranium mining plans.
In Australia, however, industry watchers said it is likely to hold on to a 51 percent stake in the Bylong project as it is still in the initial exploration stages. KEPCO acquired a 100 percent stake in the mine in 2010 for $340 million.
Both the ministry and KEPCO officials said the ministry’s guidelines are not binding and that further details need to be fixed.
By Seo Jee-yeon (jyseo@heraldcorp.com)
