SK Energy Steps on the Gas to Explore Natural Resources

CEO Koo forecasts crude oil price hikes whenever the global economy rebounds

SK Energy President and CEO Koo Ja-young said, "Crude oil prices could skyrocket whenever the global economy recovers, so now is the time when efforts to develop new energy sources and explore natural resources will have to be accelerated." Koo made the remarks at a news conference on April 28 at the Korea Press Foundation for the first time since he took the helm of Korea's leading energy provider on March 13.
He said, "As the economic downturn pulled down demand for petroleum, natural resources exploration activities declined, and chances are high that crude oil prices could soar as supply restrictions will likely be coupled with stricter regulations over energy sources with higher greenhouse gas emissions." Recognizing a temporary situation of low-crude prices, he said there is a need for putting more energy into developing new energy sources.
Koo said, "SK Energy is aggressively working on the development of clean carbon energy, green car batteries and Clean Development Mechanism (CDM) projects. An explosive growth of new businesses will lower the portion of revenues from the refining and gas station sectors." He said SK Energy is in a position to pay as much for exploring overseas mining blocks as it does in the new energy business sector, and such majors as Exxon Mobil and BP are investing as much this year in securing mining blocks as they did last year.
Korea's own energy development rate that stood at a paltry 5.7 percent is still low, he said, adding that Korean companies are still searching for additional mining zones across all continents, which is something the government needs to support.
Koo said SK Energy has set its sights on raising its ranking among global petroleum energy companies from its current 60th to the top 10 by developing new and renewable energy technologies and securing additional mining blocks.
SK Energy Sees 1st Qtr. Revenues Decline 14%
SK Energy, Korea's leading energy provider, on April 24 announced first quarter earnings results for 2009. Q1 revenues decreased by 14 percent to 8.105 trillion won from the same period last year, while operating profit and net income increased by 62 percent and 2 percent year-over-year (YoY) to stand at 645.8 billion won and 247 billion won, respectively.
Revenues for the first quarter declined by 14 percent YoY as overall product prices decreased due to lower crude oil prices.
SK Energy's operating profit jumped by 62 percent YoY, based on strong performance and operational excellence. Other factors such as additional petroleum export volume, propelled by the full operation of the No. 2 RFCC, higher daily production volume of exploration and production (E&P), and the strong U.S. dollar versus the Korean won have attributed to a boost in operating profits.
The quarter's net income increased by 2 percent YoY, due to the significant increase in operating profit in spite of an increase in net foreign exchange losses from the continued depreciation of the Korean won in the first quarter.
Choi Joon-sung, head of Investor Relations and Controller at SK Energy, said, "Amid continued concerns of a volatile business environment and the global economic slowdown, SK Energy achieved a solid overall performance in the first quarter mainly due to the successful export drive in petroleum and petrochemical businesses." He added, "He expect second quarter market conditions to continue to be challenging. However, SK Energy is committed to strengthening the fundamental competitiveness of each business sector, and continuing its global expansion drive to diversify its export markets. nw

SK Energy President Koo Ja-young holds his first news conference since taking the helm at Korea's largest refinery.