S-Oil’s Profits Up, Hyundai Shell’s Down


S-Oil’s Profits Up, Hyundai Shell’s Down

Profits rose 30% for the base oil and lubricants business of S-Oil and fell 16% for base oil refiner Hyundai Shell Base Oil in the third quarter, while sales were up for both, compared to the same period last year.


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S-Oil’s base oil and lubricants business reported a jump in operating income to ₩376.7 billion (U.S. $265.5 million) in the third quarter, compared to ₩288.8 billion.

Revenue rose 33% to ₩945.4 billion won in the third quarter, up from ₩711.2 billion.

S-Oil produces API Group II and Group III base oils at its plant in Onsan, South Korea, and sells finished lubricants.

The products spread in Asia between base oil composite prices and high-sulfur fuel oil averaged $81.20 per barrel in the third quarter, S-Oil said in in its earnings presentation. That’s 11% higher than $73.30/bbl in the same quarter last year and a 52% increase sequentially from $53.40/bbl in this year’s second quarter. 

The base oil price spread widened considerably during the third quarter because of the lowered feedstock cost amid the decline in crude oil price, S-Oil noted.

Hyundai Shell Base Oil

Hyundai Shell Base Oil, the joint venture between South Korea’s Hyundai Oilbank and Shell, reported that its third-quarter operating profit declined to ₩50.4 billion, compared to ₩59.9 billion.

However, sales surged by 68% to ₩388.7 billion, improving from ₩231.1 billion.

The 60-40 joint venture between Hyundai Oilbank and Shell produces Group II base oil.

Hyundai Oilbank said in its earnings presentation that base oil margins improved significantly in the third quarter, as the decline in base oil prices was limited by comparison with the fall in crude oil prices. While crude oil prices fell, the Group II base oil prices spread in the third quarter was relatively small due to solid demand in the Americas and Europe, the company noted.