South Korea Launches Audit of State Oil Firm Over Overseas Crude Sale
SEOUL, South Korea (AP) – South Korea’s Industry Ministry has initiated an audit of the Korea National Oil Corp. (KNOC) following the sale of approximately 900,000 barrels of crude oil reserves to a foreign buyer, bypassing the country’s right of first refusal. The incident raises questions about the management of strategic petroleum reserves and potential vulnerabilities in South Korea’s energy security.
The oil, owned by a foreign entity, was held at a storage facility in Ulsan as part of an international joint stockpiling program established in 1999. This program allows foreign suppliers – including oil-producing nations and international firms – to utilize South Korea’s excess storage capacity. A key provision of the agreement stipulates that South Korea has priority to purchase the oil in emergency situations.
According to the ministry, KNOC failed to exercise this purchase right before the crude was sold abroad. The audit will focus on determining whether KNOC adhered to internal regulations and procedures during the sale.
“The audit will thoroughly investigate whether any internal rules were violated,” a ministry spokesperson stated. “Any confirmed violations will be met with strict disciplinary measures.”
The international joint stockpiling program was designed to bolster domestic oil supply stability. The current situation highlights potential weaknesses in the system and raises concerns about the oversight of foreign-owned oil stored within the country’s reserves.
The incident comes at a time of heightened global energy concerns, and underscores the importance of maintaining robust and secure strategic petroleum reserves. Further details are expected following the completion of the audit.
Reporting by Asia Today, translated by United Press International.
