Strong government support as 100% government-owned national oil company Strategic importance of petroleum stockpiling to Korea Access to low cost funding in exploration&production (E&P) Inferior competitive position to global major oil companies in overseas E&P operations Large capital expenditure needs for overseas E&P business Potential credit risk for management of SAER funds, albeit low The rating on KNOC reflects strong government support, the strategic importance of KNOC's role to the Korean government and economy, and the company's strong financial flexibility. The rating is constrained by the relatively large capital expenditures planned through 2009, and possible fluctuations in profit and cash flow from the expansion of the E&P business, which has higher risk attributes than the rest of KNOC's
