South Korea has announced plans to merge Korea National Oil Corporation (KNOC) and Korea Gas Corporation (KOGAS) into the Energy Resources Corporation, creating a single state-owned institution responsible for oil and gas resource acquisition. The government says the move would strengthen energy security as the Russia-Ukraine war and instability in the Middle East increase supply-chain risks. It also expects combined exploration, development, geological, feasibility-assessment and contract-management capabilities to reduce duplicated investment and improve bargaining power overseas. The largest issue is KNOC’s financial condition: its debt was about ₩20 trillion ($14.7 billion), while liabilities exceeded assets by more than ₩2.5 trillion ($1.8 billion) at the end of last year. KOGAS also had about ₩40.59 trillion ($29.9 billion) in debt in the first half of this year, a 345% debt-to-equity ratio and nearly ₩14.178 trillion ($10.4 billion) in uncollected receivables. The government is considering placing KNOC’s non-performing assets and liabilities in a separate liquidation entity before combining its viable operations with KOGAS. Detailed integration measures are due in the first half of next year, alongside debt-resolution steps, legislative amendments and consultations with shareholders and labor unions. The merger would be the third consolidation attempt after unsuccessful efforts under the Park Geun-hye and Moon Jae-in administrations.