Korea's industry ministry denies decision on oil, gas company merger structure

South Korea's industry ministry said Monday that it has not decided how to combine Korea National Oil Corp. and Korea Gas Corp., pushing back on a report that it was weighing a holding company structure and a spin-off of the oil company's troubled operations.

The Ministry of Trade, Industry and Energy said it is reviewing "various alternatives, including the establishment of a subsidiary" to shore up the financial health of the state-run oil company, but that no specific integration method has been determined. The statement responded to a Korea Economic Daily report that the government was considering setting up a separate holding company during the merger and separating Korea National Oil Corp.'s loss-making businesses into a subsidiary.

"As the specific integration method has not yet been confirmed, we ask for caution in related reporting," the ministry said in the release, issued Monday under the title "No specific integration method for Korea National Oil Corp. and Korea Gas Corp. has been decided."

The ministry said it will flesh out the merger plan after weighing the need to secure the oil company's financial soundness together with the need to protect the interests of Korea Gas Corp.'s shareholders.