Korea National Oil Corp.

Overview Key strengths Key risks Major government-related entity as the Korean government's sole oil policy arm. Smaller scale compared with other national oil and gas companies in the region. Monopoly in stockpiling and managing Korea's strategic oil reserves. Earnings exposure to inherent volatility and cyclicality of the oil and gas sector. Strong access to low-cost funding as a key government-related entity. High debt levels. . We expect KNOC to continue benefiting from extraordinary government support in times of distress. We believe the company plays a critical role as the government's sole legally mandated oil policy arm. KNOC will likely maintain a monopoly in the stockpiling and management of Korea's strategic oil reserves. The government's full ownership of KNOC also enables

...The ratings on Korea National Oil Corp. (KNOC) are equalized with those on South Korea. We expect KNOC to continue benefiting from extraordinary government support in times of distress. We believe the company plays a critical role as the government's sole legally mandated oil policy arm. KNOC will likely maintain a monopoly in the stockpiling and management of Korea's strategic oil reserves. The government's full ownership of KNOC also enables ongoing financial support and tight supervision. As a major government- related entity, KNOC should maintain strong access to credit markets and benefit from low funding costs. Rising oil prices will likely improve KNOC's profitability over the next 12 months. We anticipate the company will post a recovery in operating profit in 2021, mainly due to a rebound in earnings in its exploration and production (E&P) business. Accordingly, KNOC's...

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