• Company Expects to Secure 700Million bbl of Oil and Gas by 2010 as Part of Expanding Global Exploration and Production Plan
SK Energy (formerly SK Corporation), Korea’s leading energy provider, announces that it fully supports South Korea’s energy independence.
“By increasing investment in our worldwide exploration and production business, we anticipate that our proven reserves will reach 700 million bbl by 2010,” said Shin Heon-Cheol, President and CEO of SK Energy. “The amount of oil and gas we expect to obtain will surpass South Korea’s annual oil consumption. In keeping with the Korean government’s goal of attaining a national energy independence ratio of 18 percent, we will continue to contribute to national energy security and the nation’s energy independence.”
Korea’s annual crude oil refining capacity is 900 million bbl; nearly 300 million bbl of this was exported in 2006. In three years, SK Energy’s expected proven reserve of 700 million bbl will exceed Korea’s annual average domestic consumption of 600 million bbl.
Successful Worldwide Exploration and Production
SK Energy’s global exploration and production activities are currently taking place in 25 blocks in 14 countries. The company has proven reserves of 510 million bbl today, and its daily production now stands at 24,000 b/d; but daily production is expected to exceed 70,000 b/d, thanks to anticipated additional supply from exploration blocks.
Once SK Energy’s production starts at Brazil’s BMC-8 block in the second half of 2007, and LNG production commences in Yemen and Peru in late 2008 and late 2009, respectively, the company’s proven oil and gas reserves should increase significantly. Production in Vietnam’s 15-1 block is expected to expand as well. Based on this overall exploration and production forecast, it’s anticipated that SK Energy’s proven reserves will reach 700 million bbl by 2010.
Continued Global Energy Investments
“We plan on investing KRW 544 billion in our E&P business in 2007, and we’ll continue to invest around the world in order to achieve our goal of securing proven reserves of one billion bbl by 2015,” said Shin. “SK Energy is a truly global enterprise. We are wholeheartedly committed to Korean energy independence as well as to strategic investments in overseas resource development, which have boosted our export ratio to 50 percent of sales.”
Strong Operating Profits
SK Energy’s E&P division recorded operating profits of KRW 215.1 billion in 2006; this comprised almost 20 percent of the company’s total operating profits. The E&P division also generated an impressive operating income to sales ratio of more than 60 percent.
