A Mongolian oil company has publicly denied a recent report by South Korean media outlet the JoongAng Ilbo that it is withdrawing from its business operations in North Korea, in a statement issued on Friday.

The JoongAng Ilbo, citing an unnamed South Korean government source, reported on Wednesday that the Ulaanbaatar based HB Oil JSC had decided to withdraw from North Korea due to “growing pressure from the international community” following Pyongyang’s 2016 nuclear test and satellite launch.

“HBOil JSC … hereby refutes the South Korean publication known as ‘KOREA JOONGANG DAILY’, for irresponsible reporting and dissemination of erroneous news on 23 March 2016; asserting that HBOil JSC has withdrawn from its joint venture in the Democratic People’s Republic of Korea,” the statement read.

HBOil also confirmed, “that it remains fully committed to its joint venture with Korea Oil Exploration Corporation (“KOEC”) of the DPRK, and continues its tenacious efforts to progress the joint venture’s ambition for exploration and development of hydrocarbon resources onshore North Korea.”

HBOil entered into a joint venture with North Korea in 2013 and has attempted to make inroads into North Korea’s undeveloped oil and gas sector.

The company has since invested in projects that could give it access to upstream oil and gas production and downstream refinery capacity in the coming years. However there has not been much reported movement on their North Korean project, and the outlook will not have been improved by a 70 percent drop in oil prices since last year.

While the statement affirmed HBOil’s belief that North Korea represents an “exceptional business opportunity” it also stated that the company are reviewing the implications of the recently adopted UN Security Council resolution against the country.

There may also be existing concerns regarding U.S. sanctions against North Korea and the involvement of American James Passin, a hedge fund manager at Firebird Management, which owns nearly half of HBOil.

“The security risk is not small, as the oil business in D.P.R.K. is exclusively handled by the Communist Party and the military,” Paik Keun-Wook, an associate fellow of the Energy, Environment and Resources department at Chatham House, told the New York Times in January.

However in the same article, Passin had said that Firebird Management did not require a U.S. Department of Treasury license to conduct its business in North Korea and that he had it legally reviewed by an “expert” and subsequently cleared.

Additional reporting by Leo Byrne

Featured Image: oil by octal on 2006-12-24 09:53:43