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.
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.