Saudi Aramco completes acquisition of 17% stake in South Korean Hyundai Oilbank

Saudi Aramco has purchased 17 percent stake in Hyundai Oilbank from South Korean shipyard Hyundai Heavy Industries, worth $1.2 billion. (File/AP)
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Updated 18 December 2019

Saudi Aramco completes acquisition of 17% stake in South Korean Hyundai Oilbank

  • Aramco has become the second-largest shareholder of Hyundai Oilbank
  • Overseas investment will support Aramco’s strategy to expand in refining and chemicals sector

LONDON: Saudi Aramco has completed its $1.2 billion purchase of a stake in South Korea’s Hyundai Oilbank as it increases its Asian footprint.
The recently-listed oil company purchased the 17 percent stake from Hyundai Heavy Industries Holdings, through its Aramco Overseas Company unit.
“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,” the company said in a statement on Tuesday.
Gulf oil exporters are increasingly focusing on Asian markets as they send more crude oil east while the US becomes more reliant on its own shale oil and gas, primarily found in the Permian Basin of Texas and New Mexico.
Saudi Aramco listed its shares last week on the Tadawul stock exchange with the stock surging on its debut and hitting the $2 trillion valuation mark on Thursday.

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Hyundai Oilbank is a private oil refining company established in 1964

Such purchases as South Korea’s Hyundai Oilbank underscore the company’s plans to diversify away from crude oil sales toward value added sectors such as refining and petrochemical manufacturing.
The Daesan Complex, where Hyundai Oilbank’s major facilities are located, can process as much as 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, the Aramco statement said.

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Saudi Aramco is a major supplier of oil to South Korea, 90 percent of which is procured through long-term contracts of up to 20 years.
Seoul imported a total of 178.45 million barrels of crude from Saudi Arabia between January and July, according to data from Korea National Oil Corp.
Hyundai Oilbank this month reveled plans to launch a new very-low sulfur fuel oil brand to target rising demand in the maritime industry, where new rules come into force from Jan. 1 forcing shippers to reduce their sulfur emissions.
Aramco shares posted their first drop on Tuesday since being listed for five days. The stock closed at SR37.75, down by about 0.66 percent on the day, but still about 18 percent higher than the IPO price of SR32.

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Aramco international listing ‘still on the cards’: Saudi finance minister

Updated 22 January 2020

Aramco international listing ‘still on the cards’: Saudi finance minister

  • The minister said that he was “very confident” that the Saudi economy was picking up speed
  • He said that international investors had responded positively to ongoing reforms in the Kingdom

LONDON: Saudi Finance Minister Mohammed Al-Jadaan said that an international listing of Saudi Aramco was “still on the cards” but likely won’t happen soon.
He made the disclosure in an interview with Bloomberg News at the World Economic Forum’s annual meeting in Davos, Switzerland on Wednesday.
The minister also said that he was “very confident” that the Saudi economy was picking up speed, as the Kingdom successfully completed a $5 billion bond sale this week after receiving orders for four times as much.
“Yesterday showed very clearly that demand for Saudi credit is very high and very healthy. We are very pleased not only with the level of debt but also the pricing,” he said. “Demand is very positive. We are starting seeing results of Vision 2030. The numbers are proving that reform is working. We are basically cashing on the successes.
The minister said that international investors had responded positively to ongoing reforms in the Kingdom.
“I think investors are focusing on fundamentals,” he said. “They see the growth they see the potential. We are seeing a growth in FDI, a growth in the number of applications for licenses. The confidence is back in a strong way.”