By Kim Bo-eun
S-Oil has set up a long-term growth strategy to drastically cut carbon emissions to better align itself with global trends, the company said Sunday.
In its "Vision 2030," S-Oil stated it would seek to become the most competitive, creative eco-friendly petrochemical firm.
"Vision 2030 is comprised of a vision, strategic targets and an investment roadmap to be prepared for uncertainties in the management environment of the future and to maintain the company's competitive advantage," S-Oil said in a statement.
The refiner unveiled an investment roadmap seeking to minimize carbon emissions by 2030, in line with the government's pledged goal. The government earlier this month introduced a plan to take carbon emissions down to zero by 2050.
The term "clean" has been incorporated into its new vision, showing willingness to strengthen management that upholds environmental, social and governance (ESG) values.
The company said it recognizes climate change as an immediate challenge and has taken into account the associated internal and external uncertainties in investment and facility operations, while developing a mid-to long-term response strategy. S-Oil said its establishment of a company-wide carbon management system enabled it to implement cost-effective solutions to its greenhouse gas reduction obligations and make investment decisions considering carbon costs.
Meanwhile, the refiner stated it would more than double its investments in petrochemical projects, which has been a long term growth strategy for the firm.
The company pledged to successfully complete its new Shaheen Project, the second phase 7 trillion won-investment for petrochemical expansion. The project centers on building a steam cracking facility that produces ethylene from naphtha and off-gas, and an olefin downstream facility that produces polyethylene and polypropylene.
This comes after completing the residue upgrading complex and olefin downstream complex project in 2018, which cost 4.8 trillion won.
S-Oil is aiming to boost the percentage of petrochemical production volume from the current 12 percent to 25 percent.
The firm plans to maximize the profitability of existing business areas such as oil refining, petrochemicals and lubricants, while also advancing into new business areas such as hydrogen, fuel cells and recycling, to lead its sustainable growth.
S-Oil said its employees pitched a diverse range of ideas and the company hosted numerous workshops for management to set up long-term growth strategies.
S-Oil CEO Hussain A. Al-Qahtani said, "We will make sure to achieve Vision 2030 by exploring potential opportunities for growth through continuous strategic reviews," and asked all officials and employees to "more creatively respond to the changing business environment in the one-team spirit." He referred to them as the most valuable, core asset of the company.
Saudi Aramco, the world's largest oil company, is the largest shareholder of S-Oil, owning a 63.41 percent stake.
The refiner's transition comes as the energy industry undergoes fundamental and structural changes brought on and intensified by tougher regulations on greenhouse gas emissions, the emergence of renewable energy sources and technological development for electric vehicles.
Refiners face a tough business environment also due to oversupply ― with the expansion of refiners and petrochemical facilities around the world, which is intensifying competition in the industry.
Firms in the sector are operating under greater uncertainty as the global business environment has become increasingly unpredictable due to the Fourth Industrial Revolution and the increasing development of the shale gas industry.
 |
| S-Oil's headquarters in Seoul / Courtesy of S-Oil |
In its "Vision 2030," S-Oil stated it would seek to become the most competitive, creative eco-friendly petrochemical firm.
"Vision 2030 is comprised of a vision, strategic targets and an investment roadmap to be prepared for uncertainties in the management environment of the future and to maintain the company's competitive advantage," S-Oil said in a statement.
The refiner unveiled an investment roadmap seeking to minimize carbon emissions by 2030, in line with the government's pledged goal. The government earlier this month introduced a plan to take carbon emissions down to zero by 2050.
The term "clean" has been incorporated into its new vision, showing willingness to strengthen management that upholds environmental, social and governance (ESG) values.
The company said it recognizes climate change as an immediate challenge and has taken into account the associated internal and external uncertainties in investment and facility operations, while developing a mid-to long-term response strategy. S-Oil said its establishment of a company-wide carbon management system enabled it to implement cost-effective solutions to its greenhouse gas reduction obligations and make investment decisions considering carbon costs.
Meanwhile, the refiner stated it would more than double its investments in petrochemical projects, which has been a long term growth strategy for the firm.
The company pledged to successfully complete its new Shaheen Project, the second phase 7 trillion won-investment for petrochemical expansion. The project centers on building a steam cracking facility that produces ethylene from naphtha and off-gas, and an olefin downstream facility that produces polyethylene and polypropylene.
This comes after completing the residue upgrading complex and olefin downstream complex project in 2018, which cost 4.8 trillion won.
S-Oil is aiming to boost the percentage of petrochemical production volume from the current 12 percent to 25 percent.
The firm plans to maximize the profitability of existing business areas such as oil refining, petrochemicals and lubricants, while also advancing into new business areas such as hydrogen, fuel cells and recycling, to lead its sustainable growth.
S-Oil said its employees pitched a diverse range of ideas and the company hosted numerous workshops for management to set up long-term growth strategies.
S-Oil CEO Hussain A. Al-Qahtani said, "We will make sure to achieve Vision 2030 by exploring potential opportunities for growth through continuous strategic reviews," and asked all officials and employees to "more creatively respond to the changing business environment in the one-team spirit." He referred to them as the most valuable, core asset of the company.
Saudi Aramco, the world's largest oil company, is the largest shareholder of S-Oil, owning a 63.41 percent stake.
The refiner's transition comes as the energy industry undergoes fundamental and structural changes brought on and intensified by tougher regulations on greenhouse gas emissions, the emergence of renewable energy sources and technological development for electric vehicles.
Refiners face a tough business environment also due to oversupply ― with the expansion of refiners and petrochemical facilities around the world, which is intensifying competition in the industry.
Firms in the sector are operating under greater uncertainty as the global business environment has become increasingly unpredictable due to the Fourth Industrial Revolution and the increasing development of the shale gas industry.
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