The rating on Korea National Oil Corp. (KNOC) reflects strong government support for the company, the strategic importance of its role to the Korean government and economy, and its intermediate financial profile. The rating is constrained by the company's aggressive growth strategy, the potential credit risk from the management of funds for the Special Account for Energy and Resources (SAER), and the volatile nature of the independent oil and gas industry. KNOC is a 100% government-owned upstream oil company established in 1979 following the second oil shock to ensure the stable supply of oil to the Korean economy. The company is the execution arm of the Korean government with regard to oil policy matters and is regulated closely by the
