"Part of Decarbonization Green Balance"
US Subsidiary Expected to Improve Deficit
[Asia Economy Reporter Choi Dae-yeol] SK Innovation announced on the 7th that it has decided to sell its shale oil field stakes and related facilities in the North American region.
The assets being sold this time include the entire U.S. production fields and assets held by SK Plimus and SK Nemaha, subsidiaries of SK E&P America, which was established by SK Innovation for its North American field operations. The buyer is Benchmark Energy in the U.S. The sales contract was signed earlier in January, and all procedures are expected to be completed within this month. The specific sale price was not disclosed.
Previously, SK E&P America acquired stakes in production fields located in Grant and Garfield counties in Oklahoma, and Crane County in Texas in 2014. In 2018, SK Nemaha was established to purchase shares of the U.S. shale developer Longfellow, securing additional production fields in the Garfield and Kingfisher areas.
The company explained that this sale decision is part of executing a decarbonized green balance, that is, environmentally friendly management. Given that losses have continued for years due to the decline in oil prices, it is expected to help improve the parent company's performance. Both companies posted net profits only in their first year of operation and have been running deficits for several years since. According to the company’s business report, SK Plimus recorded a net loss of 59.3 billion KRW in 2019, and SK Nemaha had a net loss of 245.5 billion KRW. Although thousands of billions of KRW were invested through the U.S. subsidiaries, it is interpreted that the company judged that performance improvement would remain slow going forward.
SK Innovation stated, "As part of achieving decarbonization goals, we will accelerate portfolio transformation while focusing our capabilities on developing existing fields in the Southeast Asia region."
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