Boosting Korea's
Energy Self-Sufficiency

SK Energy is engaged in oil drilling in 31 mining blocks in 16 countries

SK Energy Co. a major affiliate of the SK Group, and the largest energy company in the country, has been spurring its operations to explore natural resources around the world amid tough competition with many countries and domestic companies in the same area of business.
Many energy companies have stepped up efforts to explore natural resources through mining districts as the business has become one of the most lucrative. At the same time, they can secure stable sources of natural resources, especially crude oil, to help keep their oil refineries running at a high level.
SK Energy, SK Networks and SK Gas, all of them energy-related affiliates of the SK Group, will invest a total of 1 trillion won this year in the exploration of natural resources, more than double the 490 billion won invested last year.
SK Energy, for one, secured a mining block in Kazakhstan in 2006. That was followed by its participation in Vietnam's 15-1/05 mining block in February last year with PetroVietnam Exploration & Production Co.,
a subsidiary of PetroVietnam, a state-run petroleum company. PVEP holds a 75 percent stake in the highly successful project and SK Energy retains the remaining 25 percent.
Last year, the company secured the operation rights to Peru's Z-46 mining block. The company also formed a consortium with Korean companies to engage in the Bagian oil district in Iraq. The company is already producing oil in Brazil's BMC-8 mining block.
The company also holds a 15-percent stake in a large logistics complex on Jurong Island off Singapore and is operating an oil terminal with storage capacity of 5.3 million barrels of oil products complete with a wharf.
SK Energy Director Lee Sang-woo said the company is engaged in oil production and exploration activities in 31 mining blocks in 16 countries. The company holds the rights to 5.1 billion barrels of oil in the various oil fields in which it holds stakes and these oil wells have been producing 24,000 barrels of oil and gas daily.
The 500 million barrels of crude oil that the company has secured so far in its oil exploration activities would amounted to 43 trillion won in value -- when converted with a crude oil price of $90 per barrel -- three times the company's total assets.
The company plans to invest 8.5 trillion won by 2015 to increase its crude oil secured in oil field stakes to 1 billion barrels, which is enough to supply the country's oil needs for 500 days, a signal that Korea's dream to become an oil independent state is not too far off.
In order to control all of the group's oil exploration projects overseas, the group set up SK International last year, which will take care of various activities needed for controlling the oil projects including the capacity to develop new resources exploration projects, investment and financing. The company's immediate aim is to expand its presences in China and other Asian countries.
In the meantime, SK Networks is engaged in the development of natural resources other than oil around the world. In May, the company took over a 45 percent stake in a large mining company, one of the five largest copper mining companies in China jointly with the Korea Mining Promotion Corp.
The Chinese copper mining company is located in Shanxi Province and has five copper mines and a copper refinery. The company can produce 1.5 million tons of copper per year. SK Networks will be able to participate in the development of copper mines for over 50 years in China with its stake in the copper mining company, which is estimated to be worth some 5 trillion won.
The company also has operations in Indonesia and Kazakhstan to explore minerals. nw

An oil drilling rig at SK Energy's oil field overseas. Chmn. Chey Tae-won of SK Group.