South Korean oil refiners beat their Japanese counterparts in combined crude oil refining capacity for the first time in history last year, claiming the fifth spot in the global market.
According to data released from Korea Petroleum Association on Monday, Korea`s daily average refining capacity came to 3,346,000 barrels last year, elbowing out its neighboring country Japan whose figure stood at 3,343,000 barrels. The top player was the U.S. with an average oil refining capacity of 18,762,000 barrels, followed by China with 15,655,000 barrels, Russia 6,596,000 barrels and India 4,972,000 barrels.
It is the first time that Korea overwhelmed Japan in its oil refining capacity since the country petrochemical industry came into being in Korea in 1964. In the 1960s and 1970s, Korea began expanding its refining facilities to ensure stability in supply energy in accordance with then the government’s policy to foster the heavy chemical industry. In the 1980s, oil refining facilities were on a steady path for expansion in line with the country’s economic growth and a rapid increase in oil consumption.
Korean refineries invested about 11 trillion won ($9.32 billion) to upgrade facilities from 2000 when demand for light oil products surged. In 2006, Korea`s four big refineries began to generate more profit from exports than from domestic sales.
In contrast, the refining capacity of Japanese oil refineries peaked at the end of the 1970s. Since the 1980s, oil consumption has declined amid rapid population aging and the bursting of the bubble economy, forcing its refineries to shut down facilities and downsize production. As a result, Japan’s refining capacity has dropped to levels in 1969 and 1970, according to Korea Petroleum Association.
Meanwhile, Korea ranked 8th in global oil consumption last year, consuming an average of 2,793,000 barrels per day. The top consumer was the U.S. with an average of 20,456,000 barrels a day, followed by China (13,525,000 barrels) and India (5,156,000 barrels).
By Han Ye-kyung and Minu Kim
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