Minister of Trade, Industry and Energy Paik Un-gyu poses with KPA Chairman Kim Hyo-suk of the Korea Petroleum Association, GS Caltex Chairman Huh Jin-soo, SK Energy President Cho Kyung-mok, S Oil President Osman and Hyundai Oilbank President Moon Jong-bak, during a meeting with CEOs of four major refinery companies,co hosted by the ministry and KPA at Lotte Hotel in downtown Seoul on Jan. 26.

A view of a meeting between MOTIE Minister Paik and CEOs of four major refinery companies. (Photos: MOTIE)

Korean refinery companies asked the government to provide support, including tax credits, to help refinery companies aggressively make facility investments to improve their competitiveness. Minister of Trade, Industry and Energy Paik Un-gyu had a meeting with CEOs of four major refinery companies, hosted by the ministry at Lotte Hotel in downtown Seoul on Jan. 26. GS Caltex Chairman Huh Jin-soo, SK Energy President Cho Kyung-mok, S-Oil President Osman, Hyundai Oilbank President Moon Jong-bak, and Chairman Kim Hyo-suk of the Korea Petroleum Association (KPA) were present at the gathering. 

The participants proposed the tax credits and other support at a time when the Korean petroleum industry is grappling with a world waning itself off petroleum dependence by developing new industries and making investments into eco-friendly facilities. They shared the view that the petroleum industry should diversify its business portfolios to such new industries as bio fuel, EV batteries, and renewable electricity generation to ensure sustainable growth. 

They also cited a need to boost petroleum facility upgrades to produce value-added products from the current 25 percent. 

That stands at 57 percent in the United States, 41 percent in Germany and 40 percent in the United Kingdom. They also want to expand investments into eco-friendly facilities to brace for more stringent environment regulations around the world. Korean refinery companies are accelerating efforts to diversify crude oil import sources and petroleum product export counties. 

In line with global trends, SK Energy and S-Oil plan to each set aside 3.5 trillion won for investments into “desulfurization” and facility upgrades by 2020. Other refinery companies are also reportedly considering investment plans. 

KPA Chairman Kim said, “The petroleum industry achieve the best-ever business performance last year, but the outlook for this year is unpredictable due to a plunge in margins, caused by crude oil price hikes.” He went on to say that the petroleum industry will redouble efforts to contribute to the improving of people’s lives on top of profit-making and the development of the nation. In particular, he said the refinery industry is aggressively investing to meet the government’s energy policies focusing on eco-friendliness and safety. 

Chairman Kim demanded that the government offer incentives, including tax credit, to the industry’s increased investments that could lead to the development of the industry and job creation. 

In return, MOTIE Minister Paik greatly praised the industry for its contribution to stabilizing energy supply and demand and economic development. He called for the industry to play a role to stabilize energy demand and supply. As consumers’ concern on domestic petroleum prices, caused by rising global crude price hikes is on the rise, Minister Paik said, the government is closely monitoring global crude oil balances.