'Translating Challenges
into Opportunities'
GS Caltex focuses on 'TX'projects and HOU plant construction

GS Caltex plans to accelerate such 'TX'projects as oil field exploration, product marketing and technology exports while making preparations for building a third Heavy Oil Upgrade (HOU) plant.
GS Caltex Chairman & CEO Hur Dong-soo has made public three management guidelines designed to tackle the uncertainties of the business environment ― epoch-making creation of values, enhancement of organizational capabilities and strengthened risk management.
Looking back on the performance of last year, Chairman Hur said in his New Year message that the oil refinery made many achievements as the new brand strategy was given a good reception from clients, with all businesses across the nation having adorned themselves with new corporate identity (CI) and retail identity (RI) signboards. He also commented that the refinery dedicated an alkylation plant and broke ground for the second HOU project as part of its efforts to realize the goal of making the refinery the "Value No. 1 Complex."At the beginning of the year, many Korean corporations have been scurrying to revise their 2006 business plan as oil prices and foreign exchange rates have dramatically surge. But GS Caltex seems to be less tense relatively as the refinery has already prepared diverse scenarios designed to deal with uncertainties.
During last year, GS Caltex Chairman Hur had told his staff to brace for crude oil price hikes, saying that energy sources are limited and prices of the Dubai crude oil on which Korea depends on are projected to stand at a range of $60.
In particular, GS Caltex has put more energy into making massive investments to upgrade refinery facilities, judging that the difference between heavy oil and light sweet oil prices would be maintained.
Importing crude oil and refining it tend to be less susceptible to foreign exchange fluctuations since the minus and plus factors coexist. GS Caltex has been drawing up its business plan on condition that the Korean currency would rise to a range of the early -900 won against the US dollar.
Reflecting rapidly changing business conditions, GS Caltex Chairman has stressed the successful implementation of major investment projects and classified risk management as one of its three management guideline the refinery has set during the year 2006. The two others are about an epoch-making creation of values, enhancement of organizational capabilities.
According to Chairman Hur, the purpose of risk management is to secure the capability to actively adjust to business environment changes. The refinery plans to conduct thorough checks and take steps to cope with possible crises related to all jobs with the goal of pushing ongoing major investment projects without a hitch and ensuring a stable operation of the planned facilities in consideration of economic consequences. GS Caltex also plans to properly deal with outside risks like oil price and foreign exchange fluctuations.
With regard to an epoch-making creation of values, Chairman Hur emphasizes a timely and successful construction of the projected second HOU plant with a capacity of 55,000 barrels per day and a perfect preparation for the third HOU plant project. The second hydrocracker project calls for investing 1.5 trillion won for completion by 2007.
GS Caltex has set its sights on continuing to make investments into such future growth engine industries as crude oil exploration projects with juicy profits, LNG and new energy sectors.
In a bid to ensure strengthened operational capabilities, the refinery plans to build a productive labor-management relationship. It is designed to prevent a recurrence of a large-scale strike that hit GS Caltex for the first time in the domestic refining industry in 2004. The company plans to establish and implement the detailed action guidelines designed to promote collaboration between the two, as they declared to do last year. It will also establish a foundation for securing a competitive edge by acquiring excellent manpower.
GS Caltex has decided to strengthen innovations by promoting management innovation programs and knowledge management based on a portfolio of business arenas and corporate culture. nw

GS Caltex Chairman & CEO Hur Dong-soo