South Korean base oil refiner S-Oil reported large increases in operating income and revenues for the quarter ending Dec. 31, 2010, compared to the year-earlier period.
S-Oil’s lubes segment posted operating income of 123.3 billion South Korean won (U.S. $111 million) for the fourth quarter, up 181 percent from 44.8 billion won in the last quarter of 2009. For the full year, the lube segment of S-Oil posted 355.5 billion won in operating income ($320 million), up 109 percent from 170.2 billion won during 2009.
Seoul-headquartered S-Oil’s lube segment revenue amounted to 517.2 billion won in the year’s final quarter, up 66 percent from 310.9 billion won in 2009’s fourth quarter. For 2010, lubes revenue totaled 1.6 trillion won, 33 percent higher than the 1.2 trillion won in revenue reported for 2009.
Citing findings by consultant Chemical Market Associates in its fourth quarter earnings presentation, S-Oil said it expects the market environment in the United States and Europe will improve further due to gradual demand recovery. That would be mainly for API Group III base oils, S-Oil noted, with slow but continued rebound of industrial activities. The base oil refiner expects the favorable market in Asia to continue due to strong demand for transportation and industrial production, mainly from China and India, with rapid economic growth. Continued growth of premium car sales in China is expected to boost demand for Group III, S-Oil noted.
S-Oils Onsan, South Korea, refinery has 10,000 barrels per day of Group III capacity, in addition to 20,500 b/d of Group II and 500 b/d of Group I capacity.