Korea National Oil Corporation, one of the most respected and reliable state-run energy corporations.
Let us continue to grow in a positive and transparent manner.

The paradigm underlying corporate management is evolving and the key is now sustainable management. Corporate activities have long been identified mainly with profit-making. However, recently it is changing so that corporations now have to embrace economic, social, environmental and ethical factors, and most important of all transparency. As such, Korea National Oil Corporation is actively promoting itself as a trustworthy and transparent company for its stakeholders in order to become a respected global national oil corporation while performing excellently. Maintaining sustainable growth in a positive and transparent manner is the future goal of Korea National Oil Corporation.

To stakeholders, Korea National Oil Corporation was founded in 1979 in order to ensure a stable supply of oils following the two oil crises in the 1970s. Since then, KNOC has played a vital role in achieving this end, despite the uncertainty of the oil markets. It has also made a significant contribution to the economic development of Korea based on our superior performance in securing and storing oils.

The business environment of the global E&P industry is not very favorable to us. We have to operate in a world that is intensely competitive and in which only the fittest survive. Major oil companies are aggressively engaged in mergers and acquisitions while actively investing in new technologies and penetrating into new strategic regions in the midst of ever-growing resource nationalism. With these trends in mind, we have established a systematic mechanism to be able to deal with these issues in addition to implementing active exchange activities with our diverse stakeholders.

As a representative example, we joined the UN Global Compact, a voluntary-based convention, in August 2007 and officially announced our commitment to corporate social responsibilities. We also published the first Sustainable Management Report in the same year to make our plans and performance for sustainable management better known to the rest of the world.

● Green Energy, Low-Carbon Green Growth
Korea National Oil Corporation has actively made R&D efforts in the low carbon green growth sector in order to accomplish the national vision of ‘low carbon green growth’ and to create a new growth engine for our organization as well. Specifically, we have focused our resources and capabilities in developing renewable energy as new sources of low carbon energy while doing our utmost to acquire CO₂ related technologies so that we can subsequently reduce greenhouse gases in accordance with the government policy.

● Implementation of globally superior ethical management
Korea National Oil Corporation is vigorously pushing ahead with the significance of ethical management and believes this will be the basis to become a globally superior oil corporation. We are resolutely committed to establishing an organizational culture that upholds autonomy and responsibility and cultivating talented employees who are ethical, creative and professional in an environment of trust and respect. To this end, strategies to improve ethics in management have been set up, which are in accordance with the growth strategy. They are followed by the establishment of a detailed roadmap to implement them. In addition, the introduction of the Compliance System has enabled us to conduct around-the-clock monitoring for compliance and to establish supportive procedures designed to remedy any problems or violations.

● The Social Responsibilities of Corporations, Company-wide Social Contributions
Korea National Oil Corporation has engaged in company-wide social activities in a systematic manner to provide substantial aid to our neighbors in need as a way of fulfilling our social responsibilities. We are implementing a management principle that emphasizes sharing our resources with neighbors in our communities through the improvement of relevant policies and the development of new welfare programs in order to make significant social contributions as a state-run corporation. For example, we have constantly upgraded the Service Mileage Input System and participated in various joint voluntary programs together with NGOs to ensure professionalism in our social activities while actively seeking to invigorate voluntary services co-participated in by the headquarters and local branches and boosting workshop and PR efforts related to the social activities. In addition, our overseas affiliates are engaged in social activities as cultural and social partners in local communities.

● Implementation of environment-friendly management policies aimed at maintaining accident-free and disaster-free work environments.
Korea National Oil Corporation practices environmently-friendly management policies in accordance with a standardized system in all areas including development and storage throughout all our work procedures from design to operation. When it comes to construction, we spare no effort in taking preemptive measures against any possible marine contamination that might occur during the operation of handling incoming and outgoing oil shipments in addition to the proper treatment of a variety of contaminating substances. In addition, the company has established and implemented the guidelines of a number of international quality and environment management system certificates, including ISO 9001, ISO 14001, KOSHA18001, ISM (International Safety Management) Code as part of our commitment to seeking zero-accident and zero-disaster operational activities as well as reducing environmental impacts through continually improving our working methods and procedures.

● GREAT KNOC, GLOBAL KNOC
Korea National Oil Corporation has set up a mid-term plan of accomplishing the daily production of 300,000 barrels by 2012 with 2 billion barrels in reserves and a long-term plan of elevating self-sufficiency ratio for oil and gas up to 40% by 2030. Proactive and aggressive management efforts so far have enabled us to lay the meaningful foundation to grow as we have acquired SAVIA-Peru in Peru in February 2009, followed by Harvest in Canada in October in addition to the successful mega-scale M&A with Sumbe, Kazakhstan in December of the same year. These consolidating efforts have elevated the daily production and reserves by 60% and 124%, respectively from 57,000 barrels and 550 million barrels in 2008 to 128,000 barrels and 880 million barrels with the self-sufficiency ratio for oil and gas soaring more than twice as much in just two years from 4% to 9%. On top of that, we have established new businesses, including overseas crude oil marketing operations and the establishment of the oil hub in addition to utilizing our retained assets to reinforce our capabilities in oil and gas industry and to spearhead developments in the oil stockpiling businesses in an ongoing effort to be reborn as the central hub in Northeast Asia.

● One step closer to the future for sustainable management
Sustainable management is one of the essential elements to secure competitive edge in the era of global competition. Korea National Oil Corporation will do its utmost to achieve tangible results through the implementation of the strategies while establishing a sustainable management system. We are also going to promote proactive communications with various stakeholders and interested parties to precisely identify their needs and to rectify any problems they might be experiencing, further establishing a culture of sharing in a transparent and harmonious manner to achieve co-prosperity. We would like to ask for your continued support for our ongoing efforts to achieve sustainable management. Thank you.