SK E&P wants to be an operator of oil fields

SK Exploration & Production (E&P) is hoping to become more deeply involved in the development of oil discoveries, with a focus on the United States, China and Vietnam, CEO Kim Tae-won said.

The SK Innovation subsidiary engages in the upstream side of the oil and gas business, which includes acquiring the rights to oil fields, assessing the reserves and drilling for crude oil on and offshore. It is the only private company in Korea that engages in the business.

Until now, SK E&P mainly participated in large-scale development projects as a non-operator. The company is now ready to become an operator, which manages the oil block. It can be a more profitable business.

“We need to focus our capacity when it comes to operatorship - the United States, China and Vietnam will be our starting point for that transformation,” said Kim. “We’ve been short-listing possible basins since 2017 to search for business opportunities.”

In terms of diversifying the portfolio, SK is also searching for business opportunities in “unconventional” resources, like shale gas, he said.

Kim acknowledges that SK has a long way to go in resources development compared to global players, like Exxon Mobile and BP. One way to overcome that gap, he says, is digital technology.

“The ability to see what others can’t see is what decides competitiveness as an E&P company. It’s natural that digital technology can offer a differentiation point,” said Kim.

One example, says SK, is the seismic exploration, which creates waves in the ground to determine the source rock that produces oil.

The company’s main goal for this year is developing technology that can be used for fields, like that involving soil analysis and data management.

“We’re expanding the application of digital technology and artificial intelligence in all of E&P’s procedures,” said Kim. “A cloud database system is nearing completion for the U.S. business, and we’re expecting more visible outcomes this year.”

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]