Saudi Aramco signed an agreement with Hyundai Heavy Industries to acquire a 17 per cent stake in its oil refiner unit Hyundai Oilbank for 1.4 trillion Korean won ($1.24 billion).
Through Aramco Overseas Company B.V (AOC), Saudi Aramco has the option to purchase another 2.9 per cent stake, according to the stock trading agreement (SPA) signed by the two companies, Hyundai Heavy Industries said in a bourse filing.
AOC has five years to purchase 7,107,390 (2.9 per cent) shares at what would be the last selling price of the week.
AOC’s investment in South Korea’s Hyundai Oilbank will support Saudi Aramco’s crude oil placement strategy by providing a dedicated outlet for Arabian crude oil to South Korea, Saudi Aramco said.
Abdulaziz Al-Judaimi, Saudi Aramco’s senior vice president of Downstream, said: “Saudi Aramco continues to strengthen its position in the downstream sector. This acquisition demonstrates our investment in the highly complex refining sector in Asia, and continuous commitment to the region’s energy security and development.”
"The investment supports Saudi Aramco’s broader downstream growth strategy, as well as providing long term crude oil placement supply options and product offtakes as part of our trading business," Judaimi added.
Hyundai Oilbank is a private oil refining company established in 1964. 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 5 subsidiaries includes oil refining, base oil, petrochemicals, and a network of gas stations.