SK Group Sets Aside 5 Tln Won For Investment, up 22 percent
- 4.6 tln won to go to facilities, 400 bln won in R&D projects

SK Group said Jan.6 that its investment this year will total 5 trillion won, up 22 percent from last year, which breaks down to 4.6 trillion won in facilities , a 21 percent rise from last year and 400 billion won will go to R&D projects, a 33 percent jump from last year.
The group, which includes SK Oil and SK Telecom, said over 90 percent of the investment will be headed to two core sectors: 2.2 trillion won in energy and chemical and 2.5 trillion won in information and telecommunications.
SK Corp, the operator of an oil refinery and SK Telecom are the two main affiliates of the group, the fourth largest in the country. SK Corp. is destined to get 500 billion won in new investment this year. The investment figure for this year is about the same as last year as 200 billion won is annually invested in facilities by the company, said an analyst at Samsung Securities who is familiar with SK Corp.
He said SK Corp. would likely benefit from high oil prices this year, but said to sustain growth momentum and stay ahead of global energy giants, the company needs to invest more aggressively in upgrading second refinery facilities.
Finding a new growth engine should be a top business strategy priority, the industry analyst warned.
The group needs to diversify its revenue structure which heavily relies on domestic consumption, such as developing materials use for lithium-ion batteries and handsets, he said.
The group targets to sale 57 trillion won this year, up 2 trillion won from last year, which is a modest goal, according to analysts.
"We intend to focus on profitability by enhancing competitiveness of our core businesses rather than expansion," said the group in a statement.
The group said its exports this year would be around $14 billion, a 7 percent jump from last year, sharing 5.1 percent of the country's total exports totaling $254.2 billion. Exports increased 13.1 billion last year, a hike of 60 percent from 2003.
The group said it plans to conduct a group-wide restructuring process including sales of the group's non-core affiliates and the normalization of SK Networks Co. The group plans to sell its non-core subsidiaries including SK Securities, SK Life Insurance Co. to pay back creditors of SK Networks for their bailout of the trading company.
SK Corp. will continue to invest in overseas resources exploration projects this year, also. The company's aim to make Korea an oil producing country without producing not a drop of oil on its soil will continue as called for by the group's late chairman Chey Jong-hyun, the current chairman's father.
The company is either producing oil or exploring oil and gas in 17 mining blocks in 11 countries around the world since its kicking off its oil exploration overseas in 1983. Yemen, Egypt, Vietnam and Peru are some of the countries that the company has been engaged in an exploration project, securing some 300 million barrels of crude oil, about half of oil consumed annually in Korea.
SK first hit the jackpot in the Marib oil field in Yemen in 1984, realizing a dream of becoming an oil producing country for Korea. The oil field was the second one that the company decided to tap and the commercial operation of the oil field took shape in 1987 and it still is continuing.
The 15-1oil block in Vietnam in which the company holds 9 percent stake since 1998 was known to contain 420 million barrels of oil and the company continued to find oil wells in the
Southeast Asian country. The oil well started its commercial operation in October, 2003, pumping 60,000 barrels of oil per day, which rose to 85,000 barrels in November last year.
In case of an emergency, SK and Korea National Oil Corp. would be able to import 5 million barrels of oil per year from the oil well.
The company pumped up 14,000 barrels of oil per day from its offshore oil fields in 2003, which rose to 21,000 barrels last year. It was further increased to 24,000 barrels per day in November last year. The company plans to hike it to 30,000 barrels this year and 100,000 barrels in 2010 to meet half of the 10 percent oil self-sufficiency rate targeted by the government. nw