Riyadh — Mubasher: State-run Saudi Aramco, known formally as Saudi Arabian Oil Co., announced the acquisition of a 19.9% stake in South Korea’s Hyundai Oilbank Company for $1.6 billion.
The move boosts the Middle Eastern oil giant’s refining footprint in Asia, the world’s biggest crude consuming region.
Aramco and Hyundai Heavy Industries Holdings Co., which seeks to close the sale this year, are to hold board meetings early February to approve the investment, Bloomberg News reported on Monday, citing the South Korean company’s spokesman.
The world's largest oil producer is forecast to buy Hyundai Oilbank’s shares for $32.16 each.
Saudi Arabia is boosting its customer base in Asia as it pushes ahead with listing part of Aramco in what could be the biggest-ever initial public offering (IPO).
Aramco has stepped up Asian refining investments in recent years in a bid to take positions in plants in China, India, Indonesia, Malaysia and Pakistan, Bloomberg said.
“Saudi Aramco growing its footprint in the Asian refining industry is now a well-established strategy,” Vandana Hari, founder of Vanda Insights, told the New York-based news agency.
Ramping up Aramco's refining business in Asia “offers security of demand for Saudi crude and enables the company to participate in downstream margins,” he added.
Saudi Arabia was the biggest crude supplier to South Korea last year, with around 876,000 barrels per day (bpd) of shipments, making up about 29% of total imports.
