MIRA INFORM
REPORT
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Report Date : |
17.09.2013 |
IDENTIFICATION DETAILS
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Name : |
S-OIL CORP |
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Formerly Known as: |
Ssangyong Oil Refining Co Ltd |
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Registered Office : |
471,
Gongdeok-Dong, Mapo-Gu, Seoul, 121805 |
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Country : |
South Korea |
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Financials (as on) : |
31.12.2012 |
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Date of Incorporation : |
06.01.1976 |
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Legal Form : |
Public Parent
Company |
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Line of Business : |
Subject
operates as oil refining, lube oil and petrochemical division |
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No. of Employees : |
2,622 (2011) |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st 2013
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Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
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South Korea |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
South Korea ECONOMIC OVERVIEW
South Korea over the past four
decades has demonstrated incredible growth and global integration to become a
high-tech industrialized economy. In the 1960s, GDP per capita was comparable
with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined
the trillion dollar club of world economies, and is currently the world's 12th
largest economy. Initially, a system of close government and business ties,
including directed credit and import restrictions, made this success possible.
The government promoted the import of raw materials and technology at the
expense of consumer goods, and encouraged savings and investment over
consumption. The Asian financial crisis of 1997-98 exposed longstanding
weaknesses in South Korea's development model including high debt/equity ratios
and massive short-term foreign borrowing. GDP plunged by 6.9% in 1998, and then
recovered by 9% in 1999-2000. Korea adopted numerous economic reforms following
the crisis, including greater openness to foreign investment and imports.
Growth moderated to about 4% annually between 2003 and 2007. Korea''s export
focused economy was hit hard by the 2008 global economic downturn, but quickly
rebounded in subsequent years, reaching 6.3% growth in 2010. The US-South Korea
Free Trade Agreement was ratified by both governments in 2011 and went into
effect in March 2012. Throughout 2012 the economy experienced sluggish growth
because of market slowdowns in the United States, China, and the Eurozone. The
incoming administration in 2013, following the December 2012 presidential
election, is likely to face the challenges of balancing heavy reliance on
exports with developing domestic-oriented sectors, such as services. The South
Korean economy''s long term challenges include a rapidly aging population,
inflexible labor market, and heavy reliance on exports - which comprise half of
GDP.
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Source : CIA |
Company
name & address
S-Oil Corp
471,
Gongdeok-Dong, Mapo-Gu
Seoul, 121805
Korea, Republic
of
Tel: 82-2-37725151
Fax: 82-2-7824879
Web: www.s-oil.com
synthesis
Employees: 2,622
Company Type: Public
Parent
Corporate Family: 2 Companies
Traded: Korea
Stock Exchange: 010950
Over The Counter: SOOCY
Incorporation
Date: 06-Jan-1976
Auditor: PricewaterhouseCoopers
LLP
Financials in: USD (Millions)
Fiscal Year End: 31-Dec-2012
Reporting
Currency: South Korean Won
Annual Sales: 30,814.5 1
Net Income:
519.3
Total Assets: 11,719.2 2
Market Value: 7,965.3
(30-Aug-2013)
Business
Description
S-Oil Corporation
is a Korea-based oil refining and marketing company. The Company operates in
three business divisions: oil refining division, lube oil division and
petrochemical division. Its oil refining division engages in the refining and
marketing of liquefied petroleum gas (LPG), gasoline, diesel, naphtha, bunker
oil, blending oil, asphalt and others. Its lube oil division produces lube base
oil. Its petrochemical division produces and marketing petrochemicals, such as
benzene, toluene, xylene and others. The Company distributes its products
within domestic market and to overseas markets. For the six months ended 30
June 2013, S-Oil Corp revenues decreased 16% to W14.988T. Net income decreased
17% to W125.02B. Revenues reflect Refining Segment decrease of 15% to W12.236T,
Lubrication Segment decrease of 33% to W833.8B, Petrochemistry Segment decrease
of 12% to W1.919T, China segment decrease of 34% to W1.995T, Southeast Asia
segment decrease of 25% to W1.955T, Australia segment decrease of 41% to
W726.46B.
Industry
Industry
Petroleum Product Manufacturing
ANZSIC 2006: 1701 - Petroleum Refining and Petroleum
Fuel Manufacturing
ISIC Rev 4: 1920 - Manufacture of refined petroleum
products
NACE Rev 2: 1920 - Manufacture of refined petroleum
products
NAICS 2012: 32411 - Petroleum Refineries
UK SIC 2007: 1920 - Manufacture of refined petroleum
products
US SIC 1987: 2911 - Petroleum Refining
Key
Executives
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Name |
Title |
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Nasser Al-Mahasher |
Chief Executive Officer, Director |
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Yeong Yil Cho |
Chief Financial Officer, Vice President |
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Myeong Su Kim |
IR Contact Officer |
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Seong Gi Ha |
Senior Vice President |
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Ahmed Subaey |
Chief Executive Officer |
Financial Summary
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Stock Snapshot
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1 - Profit &
Loss Item Exchange Rate: USD 1 = KRW 1126.849
2 - Balance Sheet
Item Exchange Rate: USD 1 = KRW 1066.4
Corporate
Overview
Location
471,
Gongdeok-Dong, Mapo-Gu
Seoul, 121805
Korea, Republic
of
Tel: 82-2-37725151
Fax: 82-2-7824879
Web: www.s-oil.com
Quote Symbol -
Exchange
010950 - Korea Stock Exchange
Sales KRW(mil): 34,723,292.0
Assets KRW(mil): 12,497,379.0
Employees: 2,622
Fiscal Year End: 31-Dec-2012
Industry: Oil
and Gas Operations
Incorporation
Date: 06-Jan-1976
Company Type: Public
Parent
Quoted Status: Quoted
Previous Name: Ssangyong
Oil Refining Co Ltd
Chief Executive Officer,
Director:
Nasser
Al-Mahasher
Industry Codes
ANZSIC 2006
Codes:
1701 - Petroleum
Refining and Petroleum Fuel Manufacturing
1812 - Basic
Organic Chemical Manufacturing
ISIC Rev 4 Codes:
1920 - Manufacture
of refined petroleum products
2011 - Manufacture
of basic chemicals
NACE Rev 2 Codes:
1920 - Manufacture
of refined petroleum products
2014 - Manufacture
of other organic basic chemicals
NAICS 2012 Codes:
32411 - Petroleum
Refineries
324191 - Petroleum
Lubricating Oil and Grease Manufacturing
325194 - Cyclic
Crude, Intermediate, and Gum and Wood Chemical Manufacturing
US SIC 1987:
2911 - Petroleum
Refining
2992 - Lubricating
Oils and Greases
2865 - Cyclic
Organic Crudes and Intermediates, and organic Dyes and Pigments
UK SIC 2007:
1920 - Manufacture
of refined petroleum products
2014 - Manufacture
of other organic basic chemicals
19209 - Other
treatment of petroleum products (excluding mineral oil refining/petrochemicals
manufacture)
Business Description
S-Oil Corp is a
Korea-based oil refining and marketing company. The Company was formed to
import and export crude oil, manufacture and sell oil refining products, lube
products and petrochemical products, and explore, extract and dispose of energy
resources. The Company operates through three business segments: oil refining
business, lube oil business and petrochemical business. The Company’s oil
refining products include gasoline, premium gasoline, diesel and kerosene; lube
products include lube base oil and marine lubricants, and petrochemical
products include benzene, toluene, xylene and para-xylene. In April 2011, the
Company sold SK Gas Ltd.
Oil Refining Business
The Company operates an advanced oil refinery,
light oil desulfurizing facilities and gasoline manufacturing facilities. The
Company also operates a large-scale Bunker-C oil cracking center that is capable
of converting all the petroleum products into light and low-sulfur products.
Its Crude Distillation Unit produces liquefied petroleum gas (LPG), naphtha,
kerosene and diesel, B-C oils and other products from crude oil. It has three
crude distillation units of 580,000 barrels/day of total capacity. The Bunker-C
Cracking Center (BCC) is a facility, which produces value-added light oil
products, such as gasoline, diesel and kerosene, by using as feed the Bucker-C
oil that remains after extracting light oils from crude oil at the atmospheric
distillation unit.
The BCC consists of Bunker-C cracking units and
desulfurization units. The Bunker-C cracking units crack high-sulfur Bunker-C
oil through the use of hydrogen or catalyst to produce light oil products. The
desulfurization units remove sulfur and other impurities. The Hydro
Desulfurization Unit produces kerosene and diesel after removing sulfur from
them by using catalysts and adding hydrogen. It can process 120,000 barrels of
kerosene and diesel per day.
Lube Oil Business
The lube oil
business is engaged in the manufacturing of lube base oil. It has a line-up of
Group III and Group II base oil products with daily production capacity of
29,000 barrels. The Company supplies marine lubricants worldwide by forging
alliances with Idemistu of Japan and Petrolube of Saudi Arabia. It offers
automotive lubricant under the Dragon brand. Ultra-S series products are
very-high VI base oils produced under all-hydro processing route (hydro
cracking, wax hydroisomerization and hydro finishing).
The Company’s
Ultra-S series consists of five viscosity grades: Ultra-S 2 (60N), Ultra-S 3
(70N), Ultra-S 4 (100N), Ultra-S 6 (150N) and Ultra-S 8 (250N). Premium series
base oils are presented in five viscosity grades: P-8 (Premium 60N), P-20
(Premium 100N), P-31 (Premium 150N), P-96 (Premium 500N) and P-480 (150BS).
Premium series base oils are accepted in the industrial, marine and mechanic
oils, as well as in automotive engine oils. Super series base oils are purified
water-white color products, which have low aromatic and high naphthenic content
with high viscosity index. Super series base oils are presented in four
viscosity grades: S-8 (Super 60N), S-20 (Super 100N), S-31 (Super 150N) and
S-96 (Super 500N).
Petrochemical Business
The Company operates
a naphtha reforming plant with a daily capacity of 45,000 barrels and a BTX
production plant with an annual capacity of 900,000 tons. It has also built a
paraxylene production plant, the Xylene Center with a capacity of 700,000 tons
per year. The BTX facility produces aromatic petrochemical products, such as
benzene, toluene and xylene from naphtha. It forms the Company's foundation for
the business diversification in the petrochemical field. The Xylene Center uses
xylene, toluene and the by-product C9+ to produce paraxylene, the raw material
for the synthetic fiber.
More Business Descriptions
S-Oil Corporation
is a Korea-based oil refining and marketing company. The Company operates in
three business divisions: oil refining division, lube oil division and
petrochemical division. Its oil refining division engages in the refining and
marketing of liquefied petroleum gas (LPG), gasoline, diesel, naphtha, bunker
oil, blending oil, asphalt and others. Its lube oil division produces lube base
oil. Its petrochemical division produces and marketing petrochemicals, such as
benzene, toluene, xylene and others. The Company distributes its products
within domestic market and to overseas markets. For the six months ended 30
June 2013, S-Oil Corp revenues decreased 16% to W14.988T. Net income decreased
17% to W125.02B. Revenues reflect Refining Segment decrease of 15% to W12.236T,
Lubrication Segment decrease of 33% to W833.8B, Petrochemistry Segment decrease
of 12% to W1.919T, China segment decrease of 34% to W1.995T, Southeast Asia
segment decrease of 25% to W1.955T, Australia segment decrease of 41% to
W726.46B.
Oil refining and
sales of petroleum products: lube base oil and lubricating oil; petrochemicals
Oil Refining;
BTX, Lubricant, Base Oils & Lubricant Oils & Petrochemical Production
& Sales
S-Oil Corporation
Inc. (S-Oil) is a crude oil refining and refined products marketing company
operating in the Republic of Korea. The company is engaged in the production
and supply of lubricants and petrochemicals. It also produces lube base oils,
automotive engine oils and industrial oils. The company’s petrochemical
portfolio includes Benzene, Para-xylene, Toluene and Xylene etc. The company
has its crude oil refining plant located at Ulsan city, Korea. The company operates
through three business segments, namely, Oil Refining, Lube Oil and
Petrochemicals. The Oil Refining business consists of three facilities, namely,
Crude Distillation Unit, Bunker-C Cracking Center and Hydro Desulfurization
Unit. The Crude Distillation Unit produces liquefied natural gas (LPG),
naphtha, kerosene and diesel, B-C oils and other products from crude oil. This
unit consists of three facilities with a total distillation capacity of 580,000
barrels per day. The Bunker-C Cracking Center comprises a Bunker-C cracking
unit with a capacity of 148,000 barrels per day, which cracks the high-sulfur
Bunker-C oil to produce high value added products like gasoline, kerosene,
diesel and other light oils. The centre also has three Desulfurization Units that
remove sulfur and other impurities from the petroleum products. These three
desulfurization units have a combined capacity of 149,000 barrels per day. The
Hydro Desulfurization Unit produces kerosene and diesel after removing sulfur
from them by using catalysts and adding hydrogen. It consists of three
facilities with a combined capacity of 120,000 barrels per day. This unit
produces highly refined kerosene and diesel. The company through its Lube Oil
business produces and markets lube base oil and lubricants. The manufacturing
division produces three high-quality lube base oil series including Ultra-S
series, Premium series and Super series. The lubricant blending business
produces lubricants such as automotive engine oil, gear oils and marine lubricants
for wide range of industrial applications. The company has a lube base oil
production capacity of 35,000 barrels per day. The Petrochemical business
operates a BTX Plant and a Xylene centre. The BTX plant with a production
capacity of 900,000 tons per year produces aromatic petrochemical products such
as benzene, toluene and xylene from naphtha. The xylene center with a
production capacity of 740,000 tons per year produces para-xylene from xylene,
toluene and C9+. S-OIL also operates a naphtha reforming plant with a daily
capacity of 45,000 barrels. In addition to this, the company has a research and
development center (R&D Center) for the development of high-quality
products and clean energy. The R&D center conducts product quality test and
simulation tests on vehicle engines to develop environment friendly best
quality petroleum products. Through the R&D centre the company develops new
and improved products and introduces those to the Korean market. The company's
R&D center carries out various research and development activities in
cooperation with prestigious universities and research institutes in Korea to
improve its production facilities and the quality of its products, going beyond
the current technologies.
S-Oil Corporation
Inc. (S-Oil) is a service driven company operating in the petroleum and
petrochemical industry. The company focuses on the refining of crude oil and
production, and marketing of petroleum products, lube products and
petrochemicals. The company produces a wide range of petroleum and
petrochemical products, which include diesel, gasoline, kerosene, engine oil,
gear oil, transmission oil, lubricants, naphtha, paraffin oil, whale oil,
asphalt, benzene, xylene and toluene. S-Oil owns and operates a crude oil
refinery plant located at Ulsan city, Korea. S-Oil distributes and sells its
products across the Republic of Korea. It is headquartered in Seoul, South
Korea. The company focuses on the expansion of its business operations through
the launch of new service stations, as recently, it opened Ara Marina Service
Station at Gyeongin Ara Waterway Gimpo Terminal.The company reported revenues
of (Won) KRW 34,723,291.00 million during the fiscal year ended December 2012,
an increase of 8.80% over 2011. The operating profit of the company was KRW
781,764.00 million during the fiscal year 2012, a decrease of 53.95% from 2011.
The net profit of the company was KRW 585,160.00 million during the fiscal year
2012, a decrease of 50.87% from 2011.
Petroleum
Refineries
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Helpful |
Harmful |
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Internal Origin |
Strengths |
Weaknesses ·
Decline in
Profitability Indicators ·
Lawsuits |
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External Origin |
Opportunities |
Threats ·
Volatile
Business & Stringent Downstream Pricing |
Overview
S-Oil is one
among the leading oil refiners in the Asia-Pacific. The company leverages its
business operations and research and development activities to advance its
business growth objectives. However, competitive environment and stringent
government regulations could have an adverse impact on the operations of the company.
Strengths
Research and Development
The company
sturdy research and development (R&D) activities help it develop new and
innovative products, as well as enhance and improve its products. Its R&D
activities focus on the development of high-quality products and clean energy.
The company operates a R&D center, through which it conducts product
quality test and simulation tests on vehicle engines to develop environment
friendly best quality petroleum products. The company focuses on the research of
production technologies, in order to support the operation of gasoline &
DSL HDS unit, the BTX unit, the lube base oil unit, the hydrocracking unit, and
the RFCC unit, among others. The company also focuses on the improvement of
hydrocracker, and residue fluidized catalytic cracking unit, as well as the
refined oil products and lube oil products. The company's R&D center
carries out various research and development activities in cooperation with
universities and research institutes in Korea to improve its production
facilities and the quality of its products. As a result of its R&D
activities, the company has developed low-polluting clean fuel oils, clean
kerosene, winter diesel, and polymer modified asphalt.
Business Operation
The company
leverages its business operation to tap the immense market potentials. A
diversified product range supports the company's profitability and will help it
to mitigate risk. The company is one among the leading oil refiners in the
Asia-Pacific region. The company operates its business through three business
segments, namely, Oil Refining, Lube Oil and Petrochemical. Through the Oil
Refining business, the company operates light oil desulfurizing facilities and
gasoline manufacturing facilities. It has a refining capacity of 580,000
barrels/day. The Lube Oil business produces and markets lube base oil and
lubricants, which consist of three high-quality lube base oil series including
Ultra-S series, Premium series and Super series. The company has a lube base
oil production capacity of 35,000 barrels per day, which it exports to over 30
countries across the world and to more than 360 customers. The Petrochemical
business produces aromatic petrochemical products such as benzene, toluene and
xylene from naphtha; and para-xylene from xylene, toluene and C9+. For the
fiscal year ended 2012, Oil Refining accounted for 76.5%, Lube Oil with 6.7%,
and Petrochemical with 16.8%.
Healthy Liquidity Position
The company
reported a healthy liquidity position in 2012, which helps it to fulfill its operational
and working capital needs effectively and efficiently. The company’s total
current assets declined marginally from KRW8.82 billion in 2011 to KRW8.58
billion in 2012, a decline of 2.75%. The total current liabilities declined
from KRW7.23 billion in 2011 to KRW6.27 billion in 2012, a decline of 13.28%.
The decline in total current liabilities is relatively more than the decline in
the total current assets. The cash and short term investments increased from
KRW1.15 billion in 2011 to KRW1.16 billion in 2012. Moreover, the cash from
operating activities increased from KRW0.44 billion in 2011 to KRW0.73 billion
in 2012, which reflects company’s ability to meet its ongoing needs for the
smooth flow if its business. As a result, the company’s current ratio
improved from 1.22 times in 2011 to 1.36 times in 2012, its quick ratio
increased from 0.58 times in 2011 to 0.66 times in 2012, and its cash ratio
improved from 0.16 times in 2011 to 0.18 times in 2012.
Weaknesses
Decline in Profitability Indicators
The company
reported decline in profitability indicators in the fiscal year ended 2012.
Although, the company’s revenue increased from KRW31.91 billion in 2011 to
KRW34.72 billion in 2012, its operating income declined from KRW1.69 billion in
2011 to KRW0.78 billion in 2012, and net income declined from KRW1.19 billion
in 2011 to KRW0.58 billion in 2012. The gross profit also declined from KRW2.21
billion in 2011 to KRW1.31 billion in 2012. This can be attributed to the
increase in the total operating expenses from KRW 30.21 billion in 2011 to KRW
33.94 billion in 2012, with the increase in selling, general and administrative
expenses from KRW0.49 billion in 2011 to KRW0.5 billion in 2012. As a result,
the company reported decline in profitability ratios in 2012, as its gross
margin declined from 6.95% in 2011 to 3.78% in 2012, operating margin declined
from 5.31% in 2011 to 2.25% in 2012, net profit margin declined from 3.73% in
2011 to 1.68% in 2012, return on equity declined from 22.79% in 2011 to 10.88%
in 2012, return on capital employed declined from 28.44% in 2011 to 12.56% in
2012, return on assets declined from 9.02% in 2011 to 4.68% in 2012, return on
fixed assets declined from 38.77% in 2011 to 19.96% in 2012, and return on
working capital declined from 106.87% in 2011 to 33.89% in 2012.
Lawsuits
The company is
involved in various lawsuits and legal proceedings, which could not only have
an impact on the brand image of its products in the market, but also needs
significant commitments on the cost and the management resource front. In
February 2001, the company along with four other oil refineries was named
defendant in a civil lawsuit filed by the Ministry of National Defense (MND)
for a compensation loss claim of KRW158,420m. In December 2009, the company and
the other four oil refineries were asked to pay KRW130,992m jointly by the
Seoul High Court to MND, of which, the company paid KRW38,000m. However, in
September 2011, the Supreme Court annulled the decision of second trial, which
was ruled by the Seoul High Court, which claimed that the penalty of
KRW130,992m to the five oil refiners was problematically computed, and the case
was returned to Seoul High Court for recalculation. The company is also
involved in a case, in which Ulsan district tax office and the Ulju county
office imposed KRW5,180m on it related to illegal tax refund. However, the
Ulsan District Court ruled in favor of the company, but Busan High Court ruled
the company is required to pay the main tax of KRW3,565m and an additional tax
amount of KRW1,615m. In 2009, the company along with five other LPG providers
were named defendant in a lawsuit filed by FTC alleging price collusion from
2003 to 2008 and charging penalty of KRW669 billion of which, the company paid
KRW39 billion. In 2008, the company was notified by KNOC related to excess
refund of tariff, which amounts to KRW33,009m. The company is also involved in
other such cases. These matters could have an adverse affect on the company's
future growth prospects as they put an additional burden on the company's cost
structure in terms of fines imposed, penalties levied, and legal consultancy
fees.
Opportunities
Growing Global Refining Capacities
The company could
enhance its business operations with the growing global refining capacities.
The increase in capacities could be due to various reasons such as green field
and brown field refineries. According to in-house data, the global refining
capacities are expected to increase 13% from 4,664.52 million metric tonnes per
annum (MMTPA) in 2012 to 5,258.88 MMTPA in 2016. Refining capacities in the
UAE, Turkey, Ecuador, Oman, Qatar, Pakistan, Saudi Arabia, India and China are
expected to increase 86%, 71%, 171%, 27%, 52%, 38%, 57%, 35% and 31%
respectively from 2012 to 2016. The company provides consulting services to the
sulphur industry. Sulphur is the byproduct of refining industry. Such increase
in refinery capacities could provide the company substantial growth
opportunities.
Business Initiatives
The company has
undertaken certain business initiatives to achieve its business growth
objectives. In 2012, the company commenced the restoration of Taehwa Pavilion
and will donate KRW10 billion, the entire sum for restoration, to complete
restoration in 2014. The company opened Ara Marina Service Station at Gyeongin
Ara Waterway Gimpo Terminal. The service station will fuel oil directly to
ships safely and conveniently, which will contribute to vitalizing marine
sports using yachts and boats. The company entered into a 20 years long term agreement
with Saudi Aramco, the state-owned oil company of Saudi Arabia, in Dhahran,
Saudi Arabia. Through this agreement, the company could secure its supply of
crude volume, which is required to run its refinery for over 20 years.
Refinery Additions
The Asia-Pacific,
and Middle East and Africa regions are expected to install more new crude
distillation unit (CDU) capacity between 2012 and 2017 than any others.
Together, the companies plan to install a total of 8.5 million barrels per day
(MMbpd), equivalent to around 77% of global planned CDU capacity addition. In
the Middle East and Africa, Saudi Arabia, Iran and Iraq will be installing new
refineries that account for more than half of the increase in the region. In
Asia-Pacific, the majority of new build refinery construction will take place
in China, India, Indonesia and Malaysia. Of the 10 largest planned refineries
globally, five will be built in the Asia-Pacific region, four in the Middle
East and Africa region and one in North America. National Oil Companies (NOCs)
and state-owned oil companies will account for the majority of the new refining
capacity addition planned between 2012 and 2017. By 2017, NOCs are expected to
account for around 46% of global planned CDU capacity additions, assuming that all
of these projects are completed. Some of the companies building these new
refineries include PetroChina, with a total of 830 thousand barrels per day
(Mbpd) of new capacity; Saudi Aramco, with 752 Mbpd of new capacity; Sinopec,
with 542 Mbpd; Petroleos de Venezuela (PdVSA), with 534.9 Mbpd; and National
Iranian Oil Company with 468 Mbpd new capacity.
Threats
Volatile Business & Stringent Downstream
Pricing
Global oil and
gas business has become a volatile business with unpredictable crude oil
prices. This unpredictability in crude prices will affect the company in their
crude contracting. This in turn will affect the company’s future
developmental plans. Another part is the unpredictable demand for the products.
With the economic slowdown in 2009, there was a decrease in the demand for the
petroleum products. This ultimately affects the company in their refinery
margins. Adding to this, The Government has the absolute control over the
downstream pricing policy. This forces the company to sell its products at
subsidized rates. The company is not allowed to sell their products at a price
above a benchmark price set by the Government. This has made company’s
business less attractive with reducing GRM (Gross Refinery Margin)
Stringent Environmental regulations
With the Kyoto
protocol in effect, the company is facing stringent environmental regulation
norms. Under this protocol the company is given a specific carbon emission
level. Beyond this level of carbon emission the company has to enter into
carbon trading with the industry participants. This will affect the company
both in monetary and legal manner.
Competitive Environment
The oil and gas
industry is highly competitive. The company encounters strong competition from
the other domestic companies in all part of its business. The other domestic
companies include Sk energy Corp, GS Caltex Corp., Hyundai Oil refinery company
and Hyundai Lube oil company. With SK Energy being the market leader with 30%
refining share, followed by GS Caltex with 27%. S-Oil Corp. has a refining
share of 20%. South-Korean Government has planned of various FDI schemes which
can cause intense competition in the refining market with the entry of foreign
oil and gas majors.
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Corporate Family |
Corporate
Structure News: |
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S-Oil
Corp |
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S-Oil Corp |
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Company
Name |
Company
Type |
Location |
Country |
Industry |
Sales |
Employees |
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S-Oil Corp |
Parent |
Seoul |
Korea, Republic of |
Petroleum Product Manufacturing |
30,814.5 |
2,685 |
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S-Oil Total Lubricants Co., Ltd. |
Subsidiary |
Seoul, Seoul |
Korea, Republic of |
Petroleum Product Manufacturing |
208.6 |
159 |
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Competitors
Report
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Company Name |
Location |
Employees |
Ownership |
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Chevron Corporation |
San Ramon, California, United States |
62,000 |
Public |
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E1 Corporation |
Seoul, Korea, Republic of |
256 |
Public |
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ExxonMobil Chemical Company |
Houston, Texas, United States |
14,000 |
Private |
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GS Caltex Corp |
Seoul, Korea, Republic of |
3,158 |
Private |
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Lyondell Chemical Co (Parent) |
Houston, Texas, United States |
7,340 |
Private |
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Shell Oil Company |
Houston, Texas, United States |
11,600 |
Private |
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SK Innovation Co Ltd |
Seoul, Korea, Republic of |
1,862 |
Public |
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SK Networks Co Ltd |
Suwon, Korea, Republic of |
3,889 |
Public |
Executive report
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Board of
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Chairman |
Chairman |
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Board Member |
Chairman |
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Chairman of the Board |
Chairman |
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Non-Executive Independent Director |
Director/Board Member |
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Board Member |
Director/Board Member |
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Non-Executive Independent Director |
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Chief Executive Officer, Director |
Director/Board Member |
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Non-Executive Independent Director |
Director/Board Member |
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Director |
Director/Board Member |
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Director |
Director/Board Member |
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Board Member |
Director/Board Member |
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Non-Executive Independent Director |
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Non-Executive Independent Director |
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Director |
Director/Board Member |
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Non-standing Director |
Director/Board Member |
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Executives |
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Chief Executive Officer, Director |
Chief Executive Officer |
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Chief Executive Officer |
Chief Executive Officer |
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President-Admin |
President |
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Deputy General Manager |
Division Head Executive |
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Assistant Managing Director |
Managing Director |
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Assistant Managing Director |
Managing Director |
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Managing Director |
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Managing Director |
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Managing Director |
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Managing Director |
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Managing Director |
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Assistant Managing Director |
Managing Director |
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Manager-Admin Business Line |
Administration Executive |
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Chief Financial Officer, Vice President |
Finance Executive |
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Sales & Marketing Manager |
Sales Executive |
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IR Contact Officer |
Investor Relations Executive |
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Vice President |
Other |
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Vice President |
Other |
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Director |
Other |
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Senior Vice President |
Other |
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Senior Vice President |
Other |
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Vice President |
Other |
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Vice President |
Other |
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Vice President |
Other |
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Vice President |
Other |
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Senior Vice President |
Other |
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Senior Vice President |
Other |
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Vice President |
Other |
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Vice President |
Other |
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Vice President |
Other |
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Significant
Developments
S-Oil Corporation Declares Interim Cash Dividend
for FY 2013 Jul 05, 2013
S-Oil Corporation announced that it has declared
its interim cash dividend of KRW 450 per share of common stock and KRW 450 per
share of preferred stock, payable on August 5, 2013 to shareholders of record
on June 30, 2013, for the fiscal year 2013. The dividend rates of market prices
are 0.6% (common shares) and 0.8% (preferred shares), respectively. The total
cash dividend amount is KRW 52,389,287,550.
S-Oil Corporation Declares Annual Cash Dividend for
FY 2012 Feb 28, 2013
S-Oil Corporation announced that its Board of
Directors has declared an annual cash dividend of KRW 2,200 per share of common
stock and KRW 2,225 per share of preferred stock for the fiscal year 2012 to
shareholders of record on December 31, 2012. The dividend rates of market
prices are 2.1% (common shares) and 3.6% (preferred shares), respectively. The
total cash dividend amount is KRW 256,221,351,975. The Company's annual cash
dividend for the fiscal year 2011 was KRW 3,200 per share of common stock and
KRW 3,225 per share of preferred stock.