It is reported that Saudi Aramco has agreed to acquire a 17% stake in South Korean refiner Hyundai Oil for approximately $1.25 billion. Aramco Overseas Co., a subsidiary of Saudi Aramco, will acquire the stake from Hyundai Heavy Industries, the parent company of Hyundai Oil Corp. Hyundai Heavy Industries announced the deal in January, but said at the time that Saudi Aramco would buy a 19.9 percent stake in Hyundai Petroleum.
Saudi Aramco stated that the transaction enabled it to sell oil to Hyundai Oil Company, found a new market for the company’s oil, and supported the company’s crude oil layout strategy. It is also the latest in a series of downstream and chemical investments by Saudi Aramco. Abdulaziz al-Judaimi, senior vice president of Saudi Aramco’s downstream business unit, said: “Saudi Aramco continues to strengthen its position in the downstream industry. This acquisition is our latest investment in the diversified refining industry in Asia.”
Hyundai Oil has a comprehensive production base in Daesan, South Korea, and operates a refinery with a crude oil processing capacity of 650,000 barrels per day. The company produces a variety of petrochemicals at the refinery, including aromatics and propylene. Hyundai Oil said its joint venture with Japan’s Cosmo Oil Co, Hyundai Cosmo, has a combined benzene, toluene and xylene production capacity of 1.42 million tonnes per year at the Daesan refinery.
Hyundai Chemical, a subsidiary of Hyundai Petroleum and Lotte Chemical, is planning to build a world-class petrochemical complex in Daesan that will use heavy fuel oil as a feedstock to produce olefins and other downstream products . The petrochemical complex is scheduled to start production in 2021.
Saudi Aramco holds a 63.4 percent majority stake in another South Korean refinery, S-Oil.
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