IBM announced a seven-year strategic IT outsourcing agreement with S-OIL Corporation (S-OIL), the third largest oil company in South Korea, to support the company's aggressive business growth plan while yielding significant savings through reduction in investment in IT infrastructure and in-house maintenance services.

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IBM will provide comprehensive outsourcing services to S-OIL in the key business areas including application operation and management, server, storage and network operation services, user support services, and disaster recovery services.

As part of the agreement, a Value Creation Center (VCC) will be set up to capitalize on IBM's expertise - industry advice, delivery skills and research capabilities - and S-OIL's industry knowledge and market insights. Staffed by employees from both companies, the VCC will focus on delivering the competitive advantage to S-OIL by driving innovation while supporting the alignment of business and technology strategies. As the VCC's first project, it will develop an advanced IT system specialized in the energy industry.

"One of the differentiating aspects of this partnership is the creation of a Value Creation Center that provides S-OIL with a structured, sustained process for innovation and industry benchmarking, allowing S-OIL to focus on its core business and expansion plan," said Joseph Msays, Vice President, Strategic Outsourcing, IBM Asia Pacific. "We believe our outsourcing services can create for S-OIL high value and innovation with which S-OIL will be able respond more effectively to the changing global business environment," said Msays.

The agreement was signed in March, 2009. Under the agreement, a service fee will be imposed based on the service provided by IBM.

About S-OIL

S-OIL Corporation is a petroleum and refinery company, headquartered in Seoul, South Korea. S-OIL was founded in 1976 during the worldwide energy crisis to ensure stable import of crude oil and the steady supply of petroleum products to the markets. It was listed on the South Korea Stock Exchange in 1987 and currently ranks among Fortune 500 companies. For more information on S-OIL, visit www.s-oil.com

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SOURCE: IBM