Lee's 'Resource Diplomacy' Lost Korea Billions

      July 23, 2013 11:42

      A total of W1.15 trillion in losses were caused by the former Lee Myung-bak administration's drive to secure natural resources abroad (US$1=W1,119). The loss is expected to swell since surveys and drilling at many mines and deposits overseas are still in progress.

      The project only recently drew widespread criticism when it was revealed that huge investments were made in drilling and other projects without proper surveys and feasibility studies as the last government focused on short-term goals or showy projects.

      According to Korea National Oil Corporation and other state-run companies involved, nine out of 75 projects pursued by the Lee administration at a cost of W24.7 billion have already been halted.

      The biggest flop was the US$4 billion acquisition of Canadian oil and gas company Harvest Operations Corp. in 2009. Over the last three years, KNOC, which bought the company, made an operating loss of $728 million from that project alone.

      The haphazard investments lost KNOC $1.8 billion over the last five years. Until 2007, the state-run company posted a $599 million profit from its investments.

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