Kang Seung-woo is the Business Desk editor at The Korea Times. Prior to this position, he covered politics, national affairs, finance and sports.
KoreaToday SK Energy Sets Eyes on Expanding Global Market
By Kang Seung-woo
By Kang Seung-woo
Staff Reporter
While most local enterprises cowered in investments and curtailed expenses last year, SK Energy has not turned away from its goal to expand in overseas markets.
South Korea's No. 1 refiner continues to evolve as a comprehensive energy provider, reaping results: resource development, growth in exports and rising global activities.
Currently, SK Energy is exploring resources in 33 areas across 16 countries and has secured reserves of 520 million barrels of petroleum situated in Peru, Brazil and Vietnam, equivalent to the amount to supply Korea for eight months.
In addition, the company produces 42,000 barrels of petroleum per day and plans to increase its reserve amount to 1 billion barrels, which would last 16 months in Korea.
The total sales and business profits in resource development have grown from 0.6 percent and 4.7, respectively, in 1999 to 1.17 percent and 16 percent in 2008.
In 2009, it gained 335.1 billion won in annual operating profits, surpassing the 300 billion won-mark for the first time.
SK Energy forecasts that average daily production will increase up to 70,000 barrels of oil per day by the end of this year when Yemen liquefied natural gas (LNG) production operates to full capacity, combining the added production volume with the start of LNG production in Peru.
In refinery business, it has turned to high-value added light crude oil and its exports account for more than half of their sales, helping the company become a dominant exporter.
Exports topped $10 billion for the first time in 2005. The firm made more than 27 trillion won, with 60 percent of sales from exports in 2008.
In 2009, exports reached 21 trillion won, which claimed 58.9 percent of the total sales. Gasoline, diesel and kerosene particularly stood out in export products.
In 2009, SK Energy's exports in the three types of oil products were tallied at 78.47 million barrels, an 8.6-percent increase from 72.14 million the previous year.
SK Energy will put spurs on its asphalt business in China.
Together with its local joint venture partner, it plans to fortify its system in production, storage and the sale of general-purpose asphalt as well as provide high-quality products.
It will further establish a local corporation that manufactures ascon, offer a variety of ways to create pavement and expand its business operations.
SK Energy has gained recognition by exporting intangible technologies as well as tangible commodities.
It signed an Operation and Maintenance (O&M) service contract, worth $78 million, with Vietnamese oil company BSR (Binh Son Refining & Petrochemical) on Sept. 15, last year.
In the deal, SK Energy will provide technologies for five years related with the manufacturing process, operation of the refinery and maintenance of the facilities.
Since last May, it has provided technical support to Equate, Kuwait's biggest petrochemical company, putting its manufacturing process to work, which can annually produce 768,000 metric tons of paraxylene (PX).
Along with technologies and management know-how, SK Energy exports catalyst-related skills, which is essential in petrochemical production.
Last July, it exported the Selective Catalytic Reduction (SCR) system to China's Huadian Group.
The eco-friendly technology reduces nitrogen oxides and emits purified air. The technology was also exported to France and Germany in 2003.
As a result, SK Energy's export of know-how is the fruit borne from running a refinery and petrochemical plant for 47 years. Beginning with Taiwan in 1998 and expanding to Singapore in 2007 and Indonesia in 2008, the energy supplier has taken big steps in selling technologies with well-organized marketing.