30 2005 Benchmarks 31 JAN Secured International Oil Terminal SK Corporation became the first Korean energy AUG YKP3089 IND Approval SK Corporation s YKP3089, a new drug PRODUCTS HIGHLIGHTS > company to take a stake in the Singapore Independent Oil Terminal. As part of SK s plans to become a major player in the Asia-Pacific candidate for treating anxiety disorders, obtained investigational new drug (IND) approval from the U.S. Food & Drug ENCLEAN MAR region, we invested a 15% stake in the large-scale petroleum storage facility located on Jurong Island, Singapore. Published White Book SK Corporation is the first Korean company to publish a White Book of Board of Director activities, providing information about corporate management and accomplishments. We distributed the book to corporate investors and shareholders at the General Meeting, as well as to members of the Korea Stock Exchange SEP Administration (FDA) and clinical trials are now underway in the U.S. YKP3089 is a promising new drug candidate for treating a range of neurological conditions. Awarded the 6th Grand Prize in Auditing SK Corporation won the 6th Grand Prize in Auditing in the public corporation category co-organized by the Korea Listed Companies Association and The Korean Institute of Certified Public Accountants. The award recognized our Audit Committee Øs achievements in transparent Premium octane level of 100 Since its introduction in 1995, EnClean gasoline, with its unique engine-cleaning additive, uses superior-grade products with strict quality controls that surpass legal requirements. The premium brand Solux, released in 2005, is an environment-friendly, high-grade gasoline containing less than 10% of restricted sulfur content (130 ppm), and much lower amounts of benzene than ordinary fuel. To improve engine performance and JUN and the Federation of Korean Industries and to faculty and staff at universities and research centers, including the Asian Institute of Corporate Governance of Korea University. Selected as a Good Corporate Governance Corporation SK Corporation won the annual corporate OCT and Board-centered management. Earned Operation Rights to Begin Oil Field Exploration SK Corporation earned the rights to begin oil field exploration in the U.S., the world s petroleum industry leader. The company acquired 70% of the share via its U.S.-based High-octane acceleration reduce knocking, we have boosted the octane level to 100, up from the average 92-94. governance award for the highest standards in SK E&P Company, which granted SK Corporation the category of Public Corporations from the administrative rights to operate the oil field Korea Stock Exchange, the only corporate exploration of Iberia North mine in Louisiana. governance evaluation agency. The award JUL recognized our efforts in achieving transparent and Board-centered management. First Anniversary of SK Angels SK Corporation s volunteer group, the SK Angels, NOV Opened Environmentally Friendly Ultra-Low Sulfur Diesel Facility SK Corporation completed construction of its environmentally friendly ultra-low sulfur diesel facility and launched production. The company marked its one-year anniversary on July 15. The group, which supports a range of philanthropic is now well prepared to meet the mandates of The Air Environment Protection Law, and has Cleaner engines with greater fuel efficiency programs, now counts more than 2,210 laid the foundation for a steady supply of members, including over 60% of our employees. environmentally friendly ultra-low sulfur diesel products. JUL Export of World s First APU Technology SK Corporation developed the proprietary catalytic process technology, APU (Advanced Pyrolysis Upgrading Technology), which DEC Finalized Agreement to Acquire Inchon Oil Refinery SK Corporation finalized the acquisition of produces BTX, by utilizing a wide range of Inchon Oil Refinery, securing the fourth-largest treated pyrolysis gasoline from ethylene production capacity of 1,115,000 bpd and crackers. We signed a partnership with Axens, enabling the company to better serve China s France, the world s No. 2 catalyst and process fast-growing energy needs. Leveraging marketing company. We expect to earn more than KRW 20 billion in royalty profits by licensing and selling this technology to global corporate experience and management knowledge, SK will be able to boost Inchon company value and drive operational synergies. More power that s environmental friendly petrochemical companies. Last October, APU This acquisition solidifies SK s leadership in the technology was awarded the 2005 Grand Prize Asia Pacific region. by New Tech Korea.
Industrial Straight Asphalt AP-3 Pavement Asphalt Cement AP-3 AP-5 Half-finished Asphalt VB-1 ZIC XQ ASPHALT The SK Corporation supplies 70% of our total production of asphalt, or 1.35 million tons, to overseas. We are LUBRICANTS recognized for offering streamlined supply channels, a superior product and Currently, the leading brand in the premium engine oil market in Korea, ZIC is emerging also as a worldwide choice for highperformance and state-of-the-art lubricants. ZIC product exports to over 15 countries now account for more than KRW 50 billion. In China, we realized a 30% year-to-year sales increase. In Russia, where ZIC s quality ensures smooth engine operation even in temperatures below 40 C, we achieved the thirdly market shared imported brand. The ZIC product family, including ZIC XQ, ZIC TOP, and ZIC XQ 5000, provides outstanding engine protection for highperforming automobiles around the world. ZIC TOP high-quality service, especially in the fast-growing market in China. To date, we have provided asphalt products that helped construct 15,000 kilometers of China s highways while we currently supply 40% of its asphalt imports. Last year, we built a Superphalt product plant in China and, this year, we established Korea s first Beijing Asphalt/ Road Research Center. Through such local efforts, we are meeting new demand for Superphalt products in West China development as well as helping to open roadways into China s North East Provinces which have harsh winters. Cut-back Asphalt MC-1 Polymer Modified Asphalt Superphalt ZIC 5000 POWER ZIC XQ The top-selling product in the premium lubricant market, ZIC XQ is fully synthetic engine oil offering outstanding engine protection. With a 5W/40 viscosity grade, ZIC XQ s low friction loss ensures lubricant strength and smoother engine operation even under the hightemperature conditions of modern engines. ZIC XQ meets all sophisticated lubrication requirements for the world s best automakers. ZIC LPG Superphalt For the first time among Korean refineries, we have developed and commercialized a polymer-modified asphalt product called Superphalt, which represents a new construction technology in Korea and now accounts for 40% of the domestic asphalt market. An outstanding product, Superphalt improves pavement durability by absorbing stress and increasing flexibility. Demand for Superphalt products rising, both at home and abroad.
Total 2005 crude oil and gas equity shares: 7.91 million barrels Marib Block, Yemen: 1.35 million barrels The No. 1 Customer Loyalty Program OKCashbag Service offers discounts and point rewards in strategic alliances with online and offline retailers and mobile service providers. Camisea Block, Peru: 2.84 million barrels 15-1 Block, Vietnam: 2.17 million barrels PETROLEUM EXPLOITATION SK Corporation first launched oil exploration in 1983 at the Karimun block in Indonesia. Today, the company participates in oil exploration and production activities in 19 blocks across 12 countries. In 2005, we received about 7.91 million barrels of crude oil and gas as our equity share from seven blocks. We added approximately 100 million barrels by commercialization of Yemen s gas field and 10 million barrels from increases at 15-1 Block, Vietnam. With successful oil exploration in Brazil, the first of its kind by a Korean company, we have the potential to acquire 20 million barrels of oil, with oil and gas equity shares that total 420 million barrels. NC-174 Block, Libya: 420,000 barrels North Zaafarana Block, Egypt: 330,000 barrels 8 Block, Peru: 520,000 barrel CI-11 Block, Republic de Cote D lvoire: 280,000 barrels OKCASHBAG The foremost customer loyalty program in Korea, OKCashbag Service offers discounts and reward points in strategic alliance with more than 40,000 business partners. Our new I Promise program delivers even greater benefits to qualified customers. In order to better serve customer needs, we are also reviewing plans to expand into diverse franchise businesses in such areas as pets, weddings, baby care and online services, including travel, lotteries and games. Online Services Travel, lottery, and games Offline Services Pets, weddings, and baby care
Polyethylene Products Polypropylene Products LIFE SCIENCE SK Corporation was the first Korean company to obtain investigational new drug (IND) approval from the U.S. Food and Drug Administration (FDA) in 1996 for antidepressant YKP10A. Our life sciences capabilities for neurological conditions has been recognized worldwide ever since. That success was followed by approvals from the U.S. FDA for new anticonvulsant drug candidate YKP509, new schizophrenia drug candidate, YKP1358 and new anxiety disorders drug candidate YKP3089 in 2005. This new drug candidate is attracting great attention because it is not only proving to be effective and safe, but also shows potential for treating other neurological conditions, such as migraines and depression. LLDPE MOPE HDPE Homo PP Impact PP Random PP New antidepressant drug candidate YKP10A New anticonvulsant drug candidate YKP509 New schizophrenia drug candidate YKP1358 POLYMER Through specialized production systems for LLDPE, HDPE, and PP in operation at the No. 2 PE and PP plant since 1996, the unit has manufactured a broad array of products using Nova s SCLAIRTECH patented lines. From cutting-edge technology devices to household products such as textiles, seating, film, consumer goods, automotive parts, and medical containers, we provide the high-quality products that allow customers to enjoy more convenient lives.
Electronic maps Real-time road guides CAR LIFE SK Corporation introduced the world s first mobile phone-based Global Positioning System (GPS) service via satellite, offering real-time road guides, electronic maps and traffic updates. NATE Drive enables drivers to find directions to a destination, ask for emergency help and receive traffic alerts, among other services. We plan to expand our traffic information coverage nationwide in 2006, the first service of it kind in Korea. In the Chinese market, we will also provide mobile phone-based telematics services that leverage our experience and technologies. By strengthening our global competitiveness in the energy and chemicals businesses and establishing a strong foundation for growth, in 2005, SK Corporation achieved petroleum, chemical and lubricant product exports of USD 10 billion, a record for the Korean energy industry. We are meeting the challenges of becoming an integrated world-class energy and chemical company. With innovation and steady growth, we will continue to build a bright future for the energy and chemical industries and a better world for everyone. Voice-recognition capability REVIEW OF OPERATIONS > Traffic updates