Handshakes East
SK innovation and JX Nippon Oil & Energy, the representative energy companies in Korea and Japan, have decided to deepen their cooperation in order to tackle structural crises in the oil refining and petrochemical industries.
On Aug. 30, SK Innovation announced that executives from the two companies discussed cooperative measures in line with a change in the global oil market at a meeting in Tokyo, Japan on Aug. 28.
The two companies are operating two joint ventures, Ulsan Aromatic Corp. and Yubase Manufacturing Asia Co. in SK Energy's Ulsan complex. They had already completed the construction of a lubricating oil factory in 2012 and a p-Xylene plant in 2014, which are fully operating. In particular, JX invested 460 billion won (US$389 million) in the p-Xylene facility, which is its largest direct investment made in Korea. The plant, which has been operating at one hundred percent capacity, is exporting 95 percent of its p-Xylene to overseas markets, including China.
Management from both companies agreed that they would accelerate efforts to target the global market, since joint projects had made a soft landing. They also agreed that the oil refining industry in Northeast Asia might continually encounter difficulties due to a growing instability in oil prices, arising from the shale gas revolution in the U.S., the construction and enlargement of production facilities in Middle East and China, and a slowdown in the demand for oil around the world. Hence, they decided that they would strengthen their cooperation to overcome the crisis.
In addition to joint projects, the two energy companies have reportedly continued their partnership by hosting joint seminars for management each year since 2004, with the participation of Choi Tae-won, the chairman of the SK Group, and Yasushi Kimura, the chairman of JX Nippon Oil & Energy.