Korea National Oil Corporation (KNOC) said it aims to raise 3.1 trillion won ($2.9 billion) by 2017 from local investors, including the National Pension Service, to help fund future overseas acquisitions.

The state-run oil company’s chief executive, Suh Moon-kyu, told a National Assembly hearing yesterday that KNOC will make efforts “to secure the funding as the firm’s investment resource.”

The proposal marks a change of tack for Korea’s state-run oil and gas companies, which have faced criticism from government after running up debt in an overseas spending spree in recent years and are under pressure to sell underperforming assets to bolster their finances.

Under the plan, KNOC would offer local investors a stake in its existing overseas assets, raising money for the state-owned company to invest in further promising energy projects.

Asia’s fourth-largest economy imports almost all of its oil and gas. It rapidly expanded overseas investments between 2008 and 2012 to boost oil and gas supplies from overseas reserves in a bid to curb inflation led by costlier energy imports.

However, its resource investment policy has changed with a change of government. Energy Minister Yoon Sang-jick said in April that Seoul would focus more on the quality of its overseas resource investments, rather than the quantity.

KNOC and state-owned Korea Gas Corp (Kogas) both plan to slim down their overseas investment portfolios and focus on upstream exploration and production activities.

KNOC posted a net loss of 904 billion won in 2012 and a 162.5 billion won loss for the first six months of 2013, mainly due to higher refining costs and worsening margins at its Canadian energy unit Harvest Operations, Suh told the hearing.

Harvest, which KNOC bought for $1.7 billion in 2009, reported a net loss of $693 million in 2012.

KNOC said last month it was considering selling “non-core” parts of Harvest, while Kogas has said it may sell some of its stake in the $18.5 billion Gladstone LNG project in Queensland, northeastern Australia, as well as part of its stake in the LNG Canada joint venture, which plans to build and operate a liquefied natural gas (LNG) export terminal in Kitimat, British Columbia.

A senior KNOC source with direct knowledge of the matter told Reuters earlier this month that the company considered Harvest’s 115,000 barrel-per-day Come-by-Chance refining plant in Newfoundland as a “non-core part of our asset.”

Suh faced criticism from members of the congressional committee in charge of public energy firms over Knoc’s acquisition of Harvest’s downstream business, particularly the loss-making refinery.

Committee members asked for immediate restructuring plans.

Reuters