Saudi Aramco aims to invest up to $1.6 billion for about for up to 19.9% of Hyundai Oilbank from Hyundai Heavy Industries Holdings, which owns 91.13% of Hyundai Oilbank. The latter has 650,000 barrels per day of refining capacity in the southwestern city of Daesan and plans to expand its petrochemical business.
Aramco plans to investment more in refining and petrochemicals, in an attempt to limit its reliance on crude as demand for oil slows. For this reason, last year it announced plans to build a 2.7 trillion won petrochemical plant with South Korea’s Lotte Chemical.
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Saudi Aramco is also the biggest shareholder in one of South Korea’s largest refiners, S-Oil Corp, with a 63.41% stake. The deal with Hyundai will now help Aramco enhance crude oil sales to Hyundai Oilbank, Reuters reported.
Saudi Arabia is the top crude oil supplier to South Korea. As for South Korea, in 2018 it imported 323.17 million barrels of crude from the kingdom, or 885,408 barrels per day (bpd).
In addition, Hyundai Oilbank’s holding company, which also includes Hyundai Heavy Industries, will use the funds to invest in new businesses and improve its financial structure.
According to Hyundai Heavy Industries, Saudi Aramco will probably value Hyundai Oilbank at 10 trillion won, or 36,000 won per share.
