President Lee Seung-hoon of Korea Gas Corp.(Kogas)(Photo:Kogas)

President Lee Seung-hoon of Korea Gas Corp. said overseas resources development should continue without interruption, as the price of oil is expected to rise in less than two years.

In his first interview with the media since his inauguration as the Kogas CEO in July 2015, He said the price of energy changes periodically. 

When the price of oil drops, consumption increases and if consumption rises, the price inevitably rises back up. Oil prices have not rebounded yet because the installations to consume more energy have yet to be completed.

He projected that oil prices will rebound in about two years. He said that prices had taken about a year to bounce back in the past, but this time will take longer because it’s coupled with a serious downturn in the global economy, badly reducing oil consumption. Exploration for natural resources overseas should continue as it did before oil prices fell, he said, with no let up.

The troubles currently facing the Kogas CEO include a reduction in Kogas sales and restructuring of the company’s overseas resources exploration.

The gas company’s Q3 sales plummeted 33.6 percent year-on-year to 4.389 trillion won due not only to low oil prices, but changes in consumers’ energy consumption patterns as they switched to more diverse electrical facilities for heat from LNG.

South Korean state-owned Korea Gas Corp.'s LNG sales in December dropped 22.8 percent from a year earlier to 3.49 million mt, compared with 4.52 million mt a year earlier, the company said.

It marks the biggest-ever decline since the company started natural gas sales in the local market in 1987.

The company's monthly LNG sales had been on the decline since December 2014, except in August when its sales climbed 5.4 percent on year to 2.08 million mt, Kogas data showed.

Kogas attributed the decline in LNG sales to higher coal-based and nuclear power generation, as it was relatively cheaper compared with LNG, as well as to an economic slump.

Milder winter temperatures in December also contributed to lower LNG use in power generation and heating, a Kogas official said.

Of the total sales in December, LNG sales to power generators dropped as much as 31.3 percent year on year to 1.29 million mt, while sales to retail gas companies for household and businesses also dipped 16.7 percent on year to 2.2 million mt.

Kogas did not disclose how much LNG it sold over January-December, but calculations based on previous Kogas reports showed it sold 31.46 million mt for the full year 2015, down 10.6 percent from 35.17 million mt in the same period last year.

The 2015 sales fell short of Kogas’ target and marked the second consecutive year of decline.

In January last year, the state utility, which has a monopoly on domestic natural gas sales, said it aims to sell 33.31 million mt of LNG in 2015, down 5.3 percent from 35.17 million mt sold in 2014.

The 2014 sales marked the first annual decline since 2009.

In January last year, Kogas also said it planned to import 33.84 million mt in 2015, down 7.4 percent from 36.33 million mt imported in 2014, which marked the first decline in its LNG annual imports since 2009.

Kogas plans to disclose its 2015 LNG imports in February when it announces its financial results for last year.

Last month, the Ministry of Trade, Industry and Energy said that South Korea's LNG demand is forecast to fall 5.3 percent over the next 15 years due to a steep decline in consumption for power production which could not be offset by tepid growth in household and industry usage.

In its long-term LNG supply plan, the ministry forecast the country's LNG demand to fall to 33.96 million mt in 2022 and 34.65 million mt in 2029, compared with its 2014 consumption of 36.49 million mt.