South Korea’s SK Innovation and Japan’s JX Nippon Oil & Energy have agreed to strengthen their partnership to overcome global structural challenges occurring in the oil and petrochemical industries.

SK Innovation CEO Chung Chul-khil and JX Nippon Oil & Energy CEO Yasushi Kimura discussed joint measures to pursue in line with changing conditions in the global oil market during a meeting in Tokyo last week.

The two companies currently operate two joint ventures: Ulsan Aromatics, which produces paraxylene primarily for the export market, and Yubase Manufacturing Asia Co. Ltd. (YMAC), which produces 1.35 million kilolitres of lubricating base oil per annum, also in Ulsan. Yubase Manufacturing Asia was established in October 2012 as a joint venture between SK and JX Nippon Oil but remains a subsidiary of SK Lubricants.

The two companies forecast prolonged difficulties ahead for Asia’s oil refining industry, due to continuing crude oil price volatility, increasing refining capacities in the Middle East and China and declining global demand for petroleum products.