| 来源类型 | Research papers |
| 规范类型 | 报告 |
| Research for Mid & Long Term Vision and Development Strategy of Korea’s Oil Industry (2/3) | |
| JUNG; Junhwan · KIM; Taeheon | |
| 发表日期 | 2017-12-31 |
| 出版年 | 2017 |
| 语种 | 英语 |
| 摘要 | ABSTRACT 1. Necessity and purpose of research ��Changes in international petroleum markets increase fluctuations in petroleum prices, and affects management environment of energy industry. Although Korea��s petroleum industry occupies a significant portion in the economy, efforts to prepare a long-term industrial policy have not been active. A long-term plan for major industrial sectors is essential, and before we establish policies, an analysis of international and domestic managerial environment and overseas cases is necessary. ��This research is the second year portion of a three-year project, reviewing responses of major countries and businesses overseas to the latest changes in international petroleum market, and deriving implications on Korea��s oil refining industry policy. 2. Major research content ��This research reviews cases of international oil companies in the upstream piece of petroleum industry, which is resources development, and studied the governmental policies and enterprises�� response to low petroleum prices in Japan, China and India that are striving to secure energy security through overseas resources development as Korea is. ��Resources development companies�� responses vary depending on the duration of low-petroleum prices. On a short-term, they try to reduce costs, adjust investment and, on a long-term, modifies their growth strategy. Amid low-petroleum prices, oil majors and independent oil and gas companies alike reduced operational expenses, curtailed capital expenditures, decreased manpower, and changed their dividend policies. As low oil prices persist for more than two years, businesses focused on saving costs through technology development and efficiency enhancement. To brace for the uncertainty of the future, they were concentrating on investment to earn short-term profits, rather than a long-term investment. ��Overseas resources development of Japan is based on a three-pillar system led by private businesses. It includes ��efficient overseas equity acquisition and energy supply�� by core company INPEX Corporation, ��strategic risk money supply and research and development support�� by JOGMEC, Japanese government��s independent administrative institution, and ��Active resources diplomacy�� implemented by the Japanese government. INPEX Corporation has recently grown to produce petroleum and gas of 500,000 b/d, with a target of 1 million b/d by early 2020s. In December 2016, Japan revised laws of JOGMEC to expand targets for capital investment and diversified sources of finance. JOGMEC will support investment for acquisition of overseas petroleum and natural gas development companies and petroleum ��development phase�� projects, and it can make direct equity investment in state-owned petroleum enterprises overseas. This is to strengthen national energy security through an active support for the acquisition of foreign companies by Japanese private companies, as opportunities abound to take over promising overseas petroleum assets and businesses due to falling oil prices. ��Three state-owned enterprises of China are striving to stabilize petroleum production by securing reserves in order to address decreasing domestic petroleum production. CNPC and Sinopec are trying to secure low-cost, large-scale reserves through continuous exploration, while CNOOC plans to invest in the upstream segment. For upstream sector investment State-owned Chinese businesses are focusing more on quality than in the past, and showing particular interest in assets of the Middle East and Russia. Also, these three major national companies are also making joint investment in the upstream sector along with other national companies or private enterprises. As is shown in their acquisition of interest of exploration rights to the inland Abu Dhabi, another strategy of Chinese national companies is to make an investment in medium-scale assets that are producing or near production in a country that does restrict the operation of the upstream sector. In fact, the Middle East region is a part of region under the One Belt One Road strategy of the Chinese government. Recently Saudi Arabia and China signed MOU to establish an investment fund worth USD 20 billion. ��The management strategy of Oil and Natural Gas Corporation (ONGC) of India, in response to the Indian government��s three policy objectives and Prime Ministry Narendra Modi��s declaration of reduction of dependence of crude oil imports by 10% has four major points. ONGC focuses on development and production of domestic assets that enables quick monetization, identification of value investment assets, and large-scale investment in domestic core resources development projects. The state-owned company is striving to rise as one of world crude oil majors through the operation of downstream state-owned companies in order to lead the efforts of the Indian government to restructure its petroleum and gas sector. ��As for the petrochemical sector, the downstream segment of petroleum industry, this paper reviewed refining industry policy and oil refinery companies�� management strategy in the Asia Pacific and the Middle East regions that are closely related to Korea��s refining industry. ��First, countries in the Asia Pacific region have differing energy policy goals, energy demand and supply situations, and status of petroleum industry, and thus they are presenting differentiated refining industry policy objectives. China and India are focused on stabilizing supply and demand of their own petroleum products through expansion and modernization of refinery plants and facilities, and plan to increase exports of petroleum products. On the other hand, Japan strives to rationalize domestic refineries with the aim to recover its competitiveness in petroleum industry and to construct local refinery plants overseas to explore overseas markets. Australia��s policy aims to maintain a stable demand and supply in domestic market through autonomous restructuring of the refining sector and increase of import of petroleum products. ��Countries in the Middle East are establishing petroleum industry policies designed to serve the overall national policy goals under long-term economic development plans. Their long-term economic development goals are to shift from resources exports to product exports, and promote non-energy industries. Hence, petroleum industry polices in most of countries in the Middle East are to attract direct foreign investment, improve old facilities, and construct a large-scale, modern new refineries. Through these expansion efforts, they are likely to relieve imbalance of demand and supply of petroleum products (especially gasoline) in domestic markets and then increase exports of surplus petroleum products exceeding domestic demand. However, due to worsening national fiscal revenue associated with protracted low crude oil prices, expansion of refinery plants are likely to be delayed. ��Long-term management strategies of major refineries in the Asia Pacific and the Middle East, competing with Korean refineries, are slightly different among them. Petroleum companies of Japan agree that due to weakening competiveness of its refining sector, they may not stand alone and thus have intensified mergers and acquisitions with the enactment of the Act on Sophisticated Methods of Energy Supply Structures. Through the refining sector restructuring, Japan is implementing sophistication and expansion of the scale of refineries to increase competiveness, which is the core element in petroleum industry; advance to overseas markets by building refineries and petrochemical plants overseas in order to reinforce profits; diversify business portfolio toward sectors such as electricity and natural gas that can create synergy with petroleum industry. Petroleum industry in China is dominated by CNPC and Sinopec, state-owned enterprises, and unlike companies in counties where petroleum industry is privatized, Chinese refinery companies pursue compatibility with government policy in addition to profitability goals. Long-term management goals of CNPC include goals of the government��s petroleum industry -- efficiency in refinery plants and facilities, eco-friendliness of petroleum products, and enhancement of profits in overseas business. Furthermore, major refinery companies in the Middle East region are state-owned and are implementing management strategy that clearly shares and reflects goals and objectives of national economic development policies and petroleum industry development plans. 3. Policy implications ��This paper presents the following policy suggestions regarding energy resources development sector through analysis of overseas cases. ��First, a consistent and sustainable policy implementation is required as the resources development have a long-term characteristics. During the rise of oil prices, investment rises, and during low oil prices, investment falls, which lacks policy consistency and sustainability. Hence, Korea is in a vicious cycle in terms of energy resources development sector. In accordance with ��A measure to improve resources development implementation process�� announced in June 2016, new investment of Korea National Oil Corporation, a public resources development corporation is in principle restricted. In addition to such constraint on public corporation��s investment, government��s support for private businesses has been curtailed as well. In 2016, financial support for Pay for Success (PFS) financing was suspended and from 2017, it was changed to a special loan which reduces support with creation of loan to cost ratio). And preferential tax schemes that used to be offered for overseas resources development projects have nearly disappeared. ��To strengthen energy security, Japan, with similar geographical conditions and energy demand and supply situation to Korea, has continued to support energy resources development companies in order to attain the policy goals set in the past. As for China, state-owned petroleum corporations continued exploration to secure large reserves at low cost and plan to continue investment on the upstream segment. ��The key to a virtuous cycle of resources development is to maintain continuity of a project through uninterrupted investments. Capacity can be accumulated through investment during decline of resources price while value added can be created during the rise of prices. Currently, Korea experiences very sluggish private investment due to low oil prices. As is shown in case of other countries, Korea��s public corporations related to resources development need to keep minimum investment to prevent base of the energy resources development industry from collapsing. ��Second, policy goals towards resources development need to be consistent with means to achieve such goals. One of the goals for overseas resources development is the reinforcement of energy security as is pointed out in the overseas resources development plan. Ultimately, to strengthen energy security, resources development industry need to be promoted and to that ends, concentration strategy is required. Japan supports major resources development businesses through equity investment. In order to develop Korea��s resources development sector that has not yet grown as an ��industry,�� the government needs to increase support for operation rights project. ��Due to differences in terms of status of petroleum industry, energy demand and supply structure, and economic development goals, nations have differentiated policy directions. Therefore, it is to be recognized that introduction of petroleum industry policies of major countries in the Asia Pacific and the Middle East regions into Korea does not guarantee policy consistency and efficiency, and copying overseas refining industry policies that are not compatible to conditions of the nation in the form of ��benchmarking�� should be avoided. Policy suggestions that can be obtained through review and analysis of cases of overseas petroleum policies mentioned earlier can be summarized as: raising efficiency of refinery industry; increasing rationality and transparency in decision-making process, designing a proper level of incentive and penalty to increase efficiency in policy implementation; strengthening private-public cooperation in policy. ��Major policy goals of petroleum industry in the Asia Pacific and the Middle East regions can be summarized as securing production efficiency through expansion and modernization of refinery facilities. Most of them are implementing refinery expansion to enhance competitiveness because they regard the efficiency of oil production as the core element of increasing petroleum industry competitiveness. Therefore Korea needs to prepare policy options to secure refining industry efficiency when it decides it is necessary to maintain the domestic refining industry base. Even now, Korea��s petroleum industry is relatively more efficient in oil production than competitors through economy of scale and sophistication of refinery plants and facilities. Hence, rather than expansion and modernization of refineries to obtain efficiency like other countries do, it is more important to maintain the present competitive edge and to boost value added of refineries through sophistication, and to make a policy to support eco-friendly petroleum products. ��As for the decision making process regarding petroleum industry, major advanced countries can be divided into those led by private businesses and countries driven by stat-owned corporations. Korea��s petroleum industry comprises private companies, and, unlike countries dominated by national corporations, requires different policy-making process. Furthermore, Korea��s refineries are important in terms of energy security, related industries such as petrochemical industry take significant share in the national economy, and refining industry is internationally competitive. As such Korea requires decision making process different even from a country led by private companies like Australia. Therefore, to determine the direction of policies for our oil refining industry, we need to prepare policy-making process suitable to Korea by studying the policy making process of Japan. First, before setting a direction for long-term refining industry policy, we need to consider whether refining industry should continue to exist in Korea at all. A comparison of social costs and benefits associated with maintaining refining industry for a long term is necessary, and discussion needs be done through a consultative body comprising the government and private sector to decide whether to retain oil refining industry. If the decision is made to retain it, the current status of and prospect for our refining industry��s competitiveness should be diagnosed and derived, and a long-term policy for the industry should be established. As a last step, a concrete implementation method to carry out the established policy direction needs to be produced. Here effective ways to improve regulation s and system related to the industry and variety of government supports should be examined. ��For effective performance of the government��s petroleum industry policies, cooperation with the private sector comprising the refinery industry is indispensable. Meanwhile, as the private businesses regard economic factors as the most critical in their decision making, one cannot expect voluntary cooperation. Thus, in implementing policies, it is crucial to design a proper mix of incentive and penalty in policy implementation process. While an incentive can be offered to align private oil refinery companies with the government��s policy, imposition of a penalty is more effective, in a certain circumstance, to carry out policies efficiently. This should be reminded when formulating a long-term policy direction for refining industry. ��It is refinery operators in the market that actually perform policies devised by the government, and a collaborative relationship between the government and them is critical to effective implementation of polices. If there were state-owned oil refinery operators, government would easily build a cooperative relationship with them to perform policies. However, in Korea where private operators are dominating refining sector, efforts to establish cooperation are necessary. And to do that, offering economic incentives as mentioned earlier is useful, but it is as important to make policy-making process transparent and guarantee the participation of private refinery operators in the process. By encouraging private refinery businesses to be involved in all the stages of establishing industry policies, a common ground for polices can be solidified, which in turn increases efficiency in policy implementation. And for the efficient operation of a public-private consultative body, every information on the policy making process should be made public and a surveillance system to check whether socially rational policies are established should be in place. |
| URL | http://www.keei.re.kr/web_keei/en_publish.nsf/by_report_year/6938F8D4A798654C49258217002826AF?OpenDocument |
| 来源智库 | Korea Energy Economics Institute (Republic of Korea) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/323058 |
| 推荐引用方式 GB/T 7714 | JUNG,Junhwan · KIM,Taeheon. Research for Mid & Long Term Vision and Development Strategy of Korea’s Oil Industry (2/3). 2017. |
| 条目包含的文件 | 条目无相关文件。 | |||||
除非特别说明，本系统中所有内容都受版权保护，并保留所有权利。
