KNOC Sets Its Sights on 'GREAT KNOC 3020'

CEO Kang Young-won of Korea National Oil Corp. gives his New Year speech at a ceremony to launch the 2011 business year.

CEO Kang announces 2011 management tasks in his New Year's message

Korea National Oil Corp. (KNOC) is accelerating its efforts to achieve the goal of producing 300,000 barrels of oil per day and securing 2 billion barrels of oil and gas reserves by 2012.
In his New Year's message, KNOC President and CEO Kang Young-won said, "Great KNOC 3020, (the goal KNOC aims to achieve by 2012) was initially thought a far cry from reality, but it is now more significant to be recognized as an attainable target." GREAT is an acronym for Globalization, Respect, Ethics, Action, Trust, while 3020 symbolizes the daily production capacity of 300 thousand barrels and the 2 billion barrels of oil and gas reserves.
Looking back on the year 2010, Kim said his corporation made several significant achievements, having not only accomplished its task to make it bigger, but also yielded many outcomes by focusing on the advancement of management systems to ramp up its inner capabilities to global standards. By introducing a merit compensation system like private enterprises, revising a collective agreement with the union, building management accounting and companywide accounting management systems, led by the introduction of International Financial Reporting Standards (IFRS), he said, KNOC is devoted to developing itself into a world-class oil exploration and development company.
KNOC grew into a public enterprise that posted 674.7 billion won in operating income in 2010 and will be able to make strides this year toward the goal of raking in 1 trillion won in operating income globally.
The president said, "The year 2011 may be a challenging year, but we have so far not only built the confidence that we can do what we set out to do, but we have accumulated successful experiences. We are very confident that we will achieve the goal of becoming a world-class state-run oil company, loved by the people for yielding tangible results, among other things."
As to the first of the tasks KNOC goals to implement during this year, he urged his executives and staff members to commit to enhancing the companyOs own development rate through successful exploration on top of its bid to make the corporation bigger through M&A activities.
The government readjusted its oil and gas development goal upward to 13 percent in 2011, 18 percent in 2012 and 30 percent in 2019. "Securing resources is a national task the nation will have to accomplish in order to evolve into a full-fledge advanced country, he said. Amid tense confrontations between North Korea and South Korea, a stable supply of resources and national energy security is a task to be addressed without failure," he said.
Second, he stressed post merger integration (PMI), which determines whether M&As made through intensive investments will be a success or a failure. He said KNOC should conduct PMI in a systematic and resolute fashion so that core manpower can be reinstated and the stabilizing of management of the acquired companies can be advanced through organic integration as well, as they will serve as regional centers for securing resources based on technology and specialization. He expressed the hope that the year 2011 will be the first year for building a foundation for global management for analyzing and realigning its business portfolios.
Third, he said, KNOC will have to strengthen its capability in the petroleum field to brace for the production of 100 million barrels of oil per year. Additionally, it should redouble its efforts to stockpile petroleum to cope with emergencies, thus raising the nationOs readiness against a crisis through its projects to stockpile petroleum and build the Northeast Asian oil hub as well as facilitating global oil trading. Kang also called for optimum management and maintenance of outdated stockpiling facilities by upgrading safety and environment systems.nw