South Korean refiners to increase capital investment

South Korea’s top three refiners are poised to increase their spending on petrochemical plants and oil exploration projects this year as part of an effort to secure new growth engines. The three refiners—SK Energy Co., GS Caltex Corp. and S-Oil Corp.—saw their earnings tumble in 2008. To recover, the companies are expanding into non-core industries. S-Oil will invest 620 billion won (US$431.86 million) to expand its paraxylene plant and set up an alkylation unit in Ulsan, an industrial city about 400 kilometers southeast of Seoul. GS Caltex will increase its spending on facilities, oil exploration projects and renewable energy projects by 36% to 1.5 trillion won (US$1.04 billion) this year. SK Energy, meanwhile, has set up a flexible investment plan due to growing uncertainty over the global economy. (February 17, 2009)