(Reuters) – South Korea’s SK Innovation Co Ltd , which owns the country’s biggest refiner SK Energy Co Ltd, said it aims to raise investment in U.S. shale fields and increase partnerships with major crude producers to stabilise energy supplies.
The company said in a statement on Thursday it wanted to expand shale gas fields in Oklahoma and Texas it acquired last year into nearby areas. It also aims to boost competitiveness by diversifying crude sources and cutting import costs.
“Given low oil prices and the cost pressure on shale companies, we are actively looking for business chances,” SK Innovation’s chief executive and president Chung Chul-khil told a press meeting.
SK Innovation via its U.S.-based unit SK E&P America in April of last year started to develop U.S. oil fields by acquiring two assets, one each in Oklahoma and Texas, for a combined 387 billion won ($350 million).
SK Innovation now considers the period from the third quarter this year to early next year a good time to acquire additional U.S. assets, and expects an increasing number of offers from producers hit by low oil prices, said Ki-tae Kim, president of exploration and production (E&P).
Global crude prices tumbled from last year’s mid-June peaks due to a supply glut, losing as much as 60 percent of their value and pressuring high-cost producers particular in U.S. shale developments.
Kim said exploration properties in the Anadarko Basin – which stretches across the western part of Oklahoma and the Texas Panhandle – would be a good fit since the company already has operations in the region.
SK Innovation’s investments last year in Oklahoma and Texas were its first in the United States since beginning its overseas E&P business in 1983, according to its web site (www.skinnovation.com).
SK Innovation suffered its first loss in decades in the fourth quarter of 2014, although better margins over January to March amid weak global oil prices helped it swing back to a profit of 321 billion won.
The statement, quoting its chief executive Chung, also said that for its chemical business its growth strategy would focus on the Chinese market.
The company said it hoped its forward investment and development plans would triple its domestic stock market value to 30 trillion Korean won ($27 billion) by 2018. ($1 = 1,105.90 won)
(Reporting by Meeyoung Cho; Editing by Tom Hogue)