Sales of 735.1 billion won for the quarter were up 37.5 percent from the previous years fourth quarter. Total revenue for SK Lubricants reached 2.7 trillion won for 2011, up 35 percent from 2010.

Parent company SK Innovation reported a 24 percent fourth quarter revenue increase over the previous quarter, recording 17 trillion won. However, the companys fourth-quarter net profit dropped 15 percent from the previous year due to a drop in refining margins and lackluster petrochemical product spreads.

SKs Sungkeum Cha, head of corporate support, said, SK Innovation showed considerable growth in revenue during the fourth quarter because of the rise in oil price, while operating profit decreased due to the drop in refining margin and weak product spreads in the petrochemical business.

The company said it is continuing its mid and long-term expansion strategies to become both a domestic and global industry leader.

SK operates a 21,000 barrel per day Group II and Group III base oil refinery in Ulsan, South Korea, with API Group II and Group III. The SK-Pertamina joint venture plant in Dumai, Indonesia, which is 65 percent owned by SK, has about 7,000 b/d of Group III capacity.

SK Lubricants is partnering with Repsol YPF on a new 13,000 b/d Group II/III base oil plant at Repsols Cartagena, Spain refinery. It is scheduled to begin production in 2014.

SK Innovation and JX Nippon Oil & Energy in August 2011 announced a joint venture to build a base oil plant at SKs Ulsan, South Korea complex. About 550,000 metric tons per year of Group III base oil capacity is expected to be on stream from June 2012, with an additional 580,000 tons per year of Group II capacity projected for 2013.

S-Oil
S-Oil reported fourth-quarter revenue of 659 billion won (U.S. $590 million) for its lube segment, a 27.4 percent increase over the previous years fourth quarter revenue of 517 billion won. For all of 2011, revenue was 2.5 trillion won, a 56 percent increase over 2010s total of 1.6 trillion won.

Operating income for the quarter was 189 billion won, a 55.5 percent increase over the previous fourth quarter revenue of 121.7 billion won. For the year, the company reported annual operating income of 717 billion won, a 102 percent increase over 2010s 355.5 billion won.

In its earnings presentation, S-Oil said it expects the lube market to rebound towards the latter part of 2012, projecting that gradual demand growth will absorb the impact of sizable capacity expansions in the Middle East and Korea.

S-Oils Onsan, South Korea, refinery has 10,000 b/d Group III capacity, in addition to 20,500 b/d of Group II and 500 b/d of Group I capacity.