Korea's major oil refiners are moving away from the bread-and-butter refining business and more toward new business areas such as electric car batteries, carbon fibers, and oil exploration. This is in response to a declining trend in petroleum product prices due to the protracted global economic recession.
According to oil refining industry sources on December 29, petroleum refiners have diversified their business portfolios of late. For example, SK Innovation is busy changing its business structure toward one not sensitive to business cycle. As part of this effort, the company signed in July this year an agreement with Beijing Automotive Industry Holding and Beijing Electronics Holding to form a joint venture to produce battery packs for electric vehicles.
In addition, the company has actively pursued investment in resource development projects. For nine months this year, it posted 742.3 billion won in sales revenue and 411.5 billion won in operating profit in oil exploration alone. GS Energy is currently reviewing a plan to invest aggressively in oil drilling projects overseas.
GS Caltex, meanwhile, is looking for opportunities in carbon fibers. The company in August this year signed an agreement with the city government of Jeonsu for jointly pursuing carbon fiber business and will build a plant in the city by 2015. It will also build a paraxylene plant in Yeosu jointly with a Japanese company at the cost of 1 trillion won. Hyundai Oilbank is mulling over a plan to invest in a mixed xylene plant with Lotte Chemical as a partner.