Oil prices continued their downward trend for two consecutive months.
They had already fallen to around $80 per barrel, significantly impacting Taewoo Group as well.
The head of the planning office brought a report summarizing the effects of the low oil prices on each affiliate.
"Many export-specialized affiliates are benefiting from the drop in oil prices. Automobiles, semiconductors, electronics—due to lower transportation costs from cheap oil, their profits have increased significantly."
"There must also be affiliates experiencing losses."
"Taewoo Refinery is suffering the most damage. Additionally, because of the falling oil prices, electric vehicle sales have stalled, while sales of internal combustion engine vehicles have increased."
Taewoo Refinery controlled half of the Korean refining market.
Being Korea's largest refinery, it was inevitably hit hard.
Furthermore, Taewoo Refinery's ongoing natural gas power plant project was also expected to be heavily affected.
"Natural gas prices have also dropped considerably, so the natural gas power plant should gain benefits."
"With the price lowered to about 70% of our initial expectations, the power plant can operate more cheaply. But due to the drop in oil prices, the cost of thermal power generation has also decreased, so the benefit isn't very significant."
In any case, it meant producing electricity more cheaply.
For Taewoo Group, which uses vast amounts of electricity across dozens of factories, this was definitely a positive.
"Certainly, the low oil price era is good for businesses. Operating factories cheaply and reducing transportation costs increases profits effortlessly."
"Since Taewoo Group is export-oriented, it is benefiting."
"This low oil price period will continue for several years. Please support each affiliate so they can adapt and operate accordingly."
"I will do so."
After finishing the report, the head of the planning office left.
Chairman Han, who had been waiting, took the baton and came inside.
"Oil prices are falling faster than expected. At this rate, I think we'll need to advance your trip to the US, Chairman."
"Certainly, oil prices are moving faster than we anticipated."
The decline in oil prices was faster than before my regression.
I wondered if this situation had been caused by my massive investment in shale gas development.
"And the US is reportedly sanctioning high-ranking officials in Venezuela."
"The sanctions are finally starting. Venezuela won't accept these sanctions; on the contrary, they will vehemently resist."
"There are even talks of promoting the sanctioned high-ranking officials."
"If this tit-for-tat continues, the US will eventually impose economic sanctions on Venezuela."
Venezuela had crossed an irreversible point.
It was destined to become the fastest collapsing country in history, and the money fleeing Venezuela would be absorbed by Taewoo Group and the Financial Tower.
"US oil companies are withdrawing completely from Venezuela as well."
"They're moving faster than expected, even before economic sanctions are imposed."
"Because the oil price drop is severe, they are pulling out. They're also ceasing oil exploration in neighboring countries and withdrawing."
Oil, called black gold.
But now, oil was treated worse than copper—far from gold.
In this situation, no one wanted to spend huge sums on oil exploration.
Oil exploration was like playing the lottery.
Just because you explore, it doesn't guarantee success; you had to try many places, relying on probability to find oil fields.
But with shrinking prizes, there was no need to buy a lottery ticket.
"That's very good. If they're halting exploration, it means oil companies' financial status is poor."
"Losses are the norm, and debt ratios are rapidly increasing."
"This is a perfect situation for acquisitions."
"Are you considering acquiring American oil companies? Ah, you mean acquiring Chesapeake. We have contracts with them, so we can acquire them at a very low price."
Preparations had been underway for years to acquire Chesapeake.
So when I mentioned acquiring oil companies, he immediately thought of Chesapeake.
"We can't buy just one company when such an opportunity arises. We should acquire Hess as well."
"To acquire Hess, you need at least $25 billion. That's even after their value dropped due to falling oil prices."
"Including debt, $30 billion should be sufficient."
"To acquire both Chesapeake and Hess, you'll need over $50 billion."
"I recall you saying you would make bold investments. At that time, Chairman Han also said he would work hard to make money."
Fifty billion dollars was an amount that easily exceeded 60 trillion won.
Even for Taewoo Securities, which earned enormous profits from the oil war, 50 billion dollars was inevitably a heavy burden.
"We can raise 50 billion dollars, but if we do, we won't have war funds left to participate in the oil war going forward."
"How about partnering with the fintech bank for the acquisition?"
"If we split the shares fifty-fifty, it's possible. We can create around 25 billion dollars as flexible funds."
"We're not going to make the acquisition immediately. I'm thinking of moving once the oil company stocks fall further."
"We'll aggressively short sell to slash Chesapeake and Hess's stock prices by half!"
Chairman Han's eyes blazed with fire.
How could his hands not tremble knowing the hard-earned funds might disappear?
That's why he was willing to bet his life on short selling to save every penny.
"If oil prices keep falling, both Chesapeake and Hess will actively pursue selling their companies."
"I understand Chesapeake since it has close ties with us, but I don't get why you want to acquire Hess too."
"Hess owns assets I want."
"What assets does Hess have besides offshore oil fields?"
"What I want are offshore oil assets. Specifically, I need shares in offshore oil fields."
Offshore oil exploration costs a huge amount.
That's why multiple oil companies often team up for exploration and share equity in proportion to their investments.
"If so, why acquire Hess? You can reduce outgoing money greatly by just buying the offshore oil shares."
"You seem to think acquiring Hess would be a loss."
"You told me the low oil price era would last several years. So, won't oil company stock prices keep falling for years?"
"In the end, it's a cycle. If you acquire firms in a downward cycle, you can resell them when the market rises."
Hess was currently valued at $25 billion.
However, when the market turned bullish in a few years, the company's value would at least double.
"Are you planning to sell Hess without including the offshore oil shares in the bullish market?"
"If a good opportunity comes, yes. Don't think of it as a loss since we can at least double the investment. Even just acquiring the offshore oil shares alone would be worth the money."
Chairman Han nodded reluctantly.
Since he was making money daily from short selling oil companies, it wasn't easy for him to accept my words quickly.
"By the way, which offshore oil fields do you want?"
"The Guyana fund is my target."
"You mean Guyana right next to Venezuela? There hasn't been any mention of viable oil fields discovered there yet."
"Guyana is right next to resource-rich Venezuela. So if we search well, there might be good oil fields."
The Guyana fund had shares divided among multinational oil companies, with Hess holding 30% equity.
"Exploration has been going on for years, but no good oil fields have been found yet. Spending $25 billion based on probabilities is too risky."
"Don't worry. Just selling Hess during a bull market will cover your costs. And a giant oil field will definitely be discovered in Guyana. I believe that."
The time for discovering Guyana oil fields was drawing near.
So it was imperative to raise as much equity as possible within this year.
If timing was delayed, no one would be willing to sell their shares.
"Understood. Then I'll gather as much funding as possible for the Hess acquisition."
"It's not over yet. We'll also acquire some of the shares ExxonMobil holds, and those held by Chinese oil companies."
"How much equity do you plan to acquire?"
"Wouldn't it have to be at least 60%? Acquiring Hess means automatically owning 30%, so if we get 5% each from other companies, we can quickly reach about 60%."
Chairman Han was speechless at the mention of 60% equity.
He then bowed politely and left.
His determined posture radiated his firm will to earn every penny possible.
***
By mid-October, oil prices had broken through to the $70 level.
There wasn't much left to reach my target price, and I was planning a business trip to the U.S. around the next month.
However, Ambassador Kang Jun-yong's visit forced me to change the schedule of my U.S. trip.
"How have you been?"
"Korea life hasn't been bad, but things in the U.S. haven't been going well."
Ambassador Kang suddenly contacted me, asking to meet.
When we met at Captain Kang's restaurant, he approached with a submissive tone from the start.
For a powerful U.S. ambassador to come with such a humble attitude meant he had a request to make.
"If there's anything you'd like to ask of me, please feel free. I'm always open to Ambassador Kang."
"The White House wants to meet Chairman Kim."
"Why me all of a sudden? Has Taewoo Group caused any problems?"
I deliberately feigned ignorance.
At this point, there was only one reason for the White House to call me.
No other reason than to ask for help with the oil war.
"As you may know, several small and medium-sized shale companies have gone bankrupt."
"OPEC's excessive oil production surely depleted the stamina of small companies. But the large companies should be able to withstand it, right?"
"The situation is more serious than expected. It is anticipated that many large shale companies will file for Chapter 11 starting next year."
Chapter 11.
In Korean terms, it could be seen as court-managed restructuring.
Simply put, it means applying for bankruptcy protection because they can't handle their debts.
It was evidence of how severely shale companies were being damaged by the oil war.
"Filing for Chapter 11 isn't necessarily a bad thing. It's an opportunity to separate the chaff from the wheat and properly nurture only the valuable ones."
"The problem is, there are too many valuable ones. The U.S. government can't protect all the companies."
"Are you hoping that Taewoo Group will acquire some shale companies?"
"If a full acquisition is difficult, we're hoping to acquire at least partial stakes."
The U.S., which we expected to snatch things up, surprisingly offered it first.
If we could get help from the U.S. government, the acquisitions could be made at much cheaper prices and better terms.
"I will consider it positively. And within this week, I will go to the U.S. to hear the White House's position directly."
"Thank you. I'm truly grateful for your positive response to this sudden request."
Not at all.
I was the one who should be thankful.
Because I was being allowed to pick only the truly valuable ones.
TL/n -
Chapter 11 (U.S. Bankruptcy Code)
It's a type of bankruptcy protection in the United States.
Instead of immediately shutting down and selling everything (like Chapter 7 bankruptcy), Chapter 11 allows a company to reorganise its debts and business.
Imagine a big airline:
It owes $10 billion but only has $2 billion in cash.
If it files Chapter 7, it would be liquidated → planes sold, employees fired, business gone.
But under Chapter 11, the airline continues flying, cuts unprofitable routes, renegotiates labor contracts, and convinces creditors to accept less money over a longer period.
After reorganization, the airline might come back stronger (this has happened with United Airlines, Delta, and General Motors).
Chapter 11 = "restructuring bankruptcy" → A legal way for companies (and sometimes individuals) to reorganise debt while continuing to operate.