Jo Kyungmok, President of SK Energy, "Shifting Oil-Centered Business to Eco-Friendly and Platform Businesses"

"Decline in Oil Demand Marks the Start of Structural Changes in the Energy Market, Not a COVID-19 Effect"

[Asia Economy Reporter Hwang Yoon-joo] Cho Kyung-mok, President of SK Energy, stated, "If we fail to actively respond to the societal paradigm shift towards low carbon, it will be difficult to guarantee future survival," and announced plans to rapidly transform the business portfolio centered on the oil business into two pillars: eco-friendly and platform businesses.

According to SK Energy on the 31st, President Cho said in a column contributed to the internal news channel, "The recent decline in oil demand should be understood not as a temporary effect caused by the novel coronavirus infection (COVID-19), but as the beginning of a structural change in the energy market."

President Cho stated, "Even if the COVID-19 situation improves compared to the present, human civilization will continue to shift towards using less oil in all aspects such as society, economy, education, and leisure," and added, "The New Normal era, where reduced oil consumption has become the norm, has already arrived."

He emphasized, "A business portfolio centered solely on the oil business cannot survive in the New Normal era," and stressed the need for a deep change that boldly breaks away from the existing business structure and traditional ways of working.

Furthermore, President Cho said, "Considering the rapidly changing management environment, we must quickly achieve a business model (BM) transformation. Currently, the company will strongly promote the transition of its business portfolio from the existing oil business to eco-friendly and platform businesses by concentrating all capabilities."

The eco-friendly business areas under consideration by SK Energy are broadly divided into three categories: ▲ securing carbon reduction technologies, ▲ promoting eco-friendly biofuel production and renewable energy businesses, and ▲ advancing environmental businesses in the Water & Waste sectors.

First, SK Energy is leading efforts to secure CCU (Carbon Capture & Utilization) technology that drastically reduces CO2 emissions to lower greenhouse gases and environmental pollutants. The refining industry is the second-largest greenhouse gas emitter in South Korea, and SK Energy plans to create both social and economic value through securing greenhouse gas reduction technologies. To this end, SK Energy is independently exploring future technologies through internal R&D and open innovation with external experts.

Additionally, SK Energy is supplying the market with eco-friendly fuels that significantly improve environmental performance for land and marine transportation fuels. The Vacuum Residue Desulfurization System (VRDS), which produces eco-friendly marine fuel, was completed in the first half of this year. Recently, the company developed recycled asphalt exclusively and is also reviewing eco-friendly biofuel businesses utilizing existing petroleum product manufacturing facilities and infrastructure.

This content was produced with the assistance of AI translation services.