SK Innovation Co. exported more than 100 million barrels of refined oil last year for the first time through its affiliate SK Energy, the company said recently.
Refined oil products account for most of the exports including light oils such as gasoline, kerosene, and diesel, all with high value-added portions, totaling 102.32 million barrels, a quantity large enough to meet five months’ fuel oil consumption of Korea, the company said.
Five years ago, exports of light oil amounted to only 70 million barrels, but they jumped to 80 million barrels in 2010 and 90 million barrels in 2011, rising more than 20 million barrels in four years.
According to the type of oil, the increase in the export of gasoline has been outstanding, as most of the oil product was for domestic use, not for export, compared to diesel, which has mostly been sold outside the country. In 2008, for example, the export of gasoline came to only 12.29 million barrels, far less than its domestic consumption of 24.23 million barrels. But last year, the overseas shipment of gasoline came to 27.79 million barrels, up 126 percent in four years and overtaking domestic sales of 25.29 million barrels.
Oil refineries turned to overseas markets to sell gasoline as the domestic market has reached the saturation point and the government policies on oil prices are unfavorable to refiners.
Exports of diesel also broke all kinds of records last year, coming in at 73 million barrels, the largest in the history of oil exports from Korea and exceeding half of the domestic sales of 136 million barrels.
Since upgrading to a holding company for the energy sector of the SK Group in 2011, SK Innovation has been able to post 100 trillion won in exports. In 2011, the sector exported 43 trillion won worth of petroleum products and in 2012 that number jumped to 53 trillion won. The share of petroleum product exports exceeded 50 percent of the group’s total revenue in 2007 and further rose to 73 percent in 2012.
The holding company first started to export its petroleum products to Singapore to build an oil product export portfolio and then gradually expanded its overseas market to Japan, China, Indonesia, Vietnam and additionally to Australia under its strategy for exploration of new markets for its oil products.
Vice Chairman Koo Ja-young of SK Innovation was named to head the Global Growth Committee to expand the exports of oil products under the strategy to make exports a main engine for the group’s growth.
SK Innovation, in a bid to speed up the exploration of new global markets for its oil products, has put its overseas market exploration strategies under a single key strategy and set up a company in a company, Global Technology, which has been given autonomy to work under its own strategies for the development of key subjects needed to back up the growth strategies of the energy sector.
The CIC strategy of the group is designed to go further up from just technology development work, but to be linked organically to actual business operations to expand exports of oil products centered around high value-added ones and solidify the global growth base.