Saudi Aramco acquires 17% of South Korea’s Hyundai Oilbank

SINGAPORE (ICIS)–Saudi Aramco has completed the $1.2bn acquisition of a 17% stake in South Korean refiner Hyundai Oilbank from Hyundai Heavy Industries.

All necessary regulatory approvals have been secured for the acquisition, the energy giant said in a statement issued late on Tuesday.

“The investment in South Korea’s Hyundai Oilbank supports Saudi Aramco’s downstream growth strategy of expanding its global footprint in key markets in profitable integrated refining, chemicals and marketing businesses which enable Saudi Aramco to place crude oil and leverage its trading capabilities,” it said.

The Daesan Complex, where Hyundai Oilbank’s major facilities are located, is a fully integrated refining plant with a processing capacity of 650,000 barrels per day.

The business portfolio of Hyundai Oilbank and its five subsidiaries includes oil refining, base oil, petrochemicals and a network of gas stations.

Saudi Aramco earlier this month raised a record $25.6bn in its initial public offering (IPO) in Saudi Arabia, bringing the state-owned energy giant’s initial valuation at $1.7tr.

The IPO is part of Saudi Arabia’s move to diversify its oil-dependent economy since crude prices crashed in mid-2014.

The company is on track to complete its acquisition of a 70% stake in petrochemicals major SABIC in the first half of 2020.

In October 2019, Saudi chemicals giant SABIC signed a $50m deal with US-based industrial service firm Baker Hughes develop local capacity, creating downstream business opportunities and industry diversification.

In Asia, Saudi Aramco’s downstream expansion includes its partnership with Malaysia’s state energy firm PETRONAS and a potential stake in Indian conglomerate Reliance Industries Ltd’s (RIL) oil-to-chemicals division.

Saudi Aramco’s refinery and petrochemical joint venture with  PETRONAS in Pengerang, Johor state, is expected to start up soon with the 300,000 bbl/day refinery at the site on track to start commercial operations by the end of this year.

At the close of trade on 17 December, Saudi Aramco’s share price was at Saudi riyal (SR) 37.75 ($10.1) , down 0.66% from the previous session.

($1 = CNY3.75)

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Thumbnail photo: A view of a petroleum processing plant in Jubail, Saudi Arabia. (Source: Str/EPA/Shutterstock)