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

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

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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Careem welcomes Saudization of ride-hailing sector, eyes further investment

Careem welcomes Saudization of ride-hailing sector, eyes further investment
Updated 16 January 2021

Careem welcomes Saudization of ride-hailing sector, eyes further investment

Careem welcomes Saudization of ride-hailing sector, eyes further investment
  • Careem said the company had been affected by the pandemic because workers stayed at home and cut down on their travel

DUBAI: Ride-hailing service Careem has welcomed a government decision to fully localize the sector in the Kingdom, saying the move will help to create more jobs for Saudi drivers.

The Saudi Ministry of Transport said the new rule would have limited impact as citizens already made up 96 percent of the workforce in the ride-hailing sector.

“We are proud that over 100,000 Saudi nationals are finding income-earning opportunities with Careem each month,” a Careem spokesperson told Arab News. “We’ve worked hand-in-hand with the Transport General Authority and Ministry of Human Resources and Social Development to help the Kingdom achieve its ambitious agenda, and applaud the efforts the government is making to support Saudis working in the ride-hailing sector.”

The spokesperson added that Careem planned to continue investing in the Kingdom with a greater range of transportation and delivery services. 

Although Careem did not give specific numbers for its operations in Saudi Arabia, it said it had 33 million registered users in 13 countries across the region and operated in 28 Saudi cities.

Ibrahim Manna, managing director of global markets at Careem, said the company had been affected by the pandemic because workers stayed at home and cut down on their travel.

“COVID-19 has impacted our ride-hailing, starting in March,” he told Arab News. “This is a natural result of lockdowns, curfews and other limitations of movement, changing user behavior and habits in daily life.”

But while the ride-hailing service decreased, food delivery demand soared.

“Delivery was one of the big growth levers,” he added. “Due to the change in the daily lives and needs of the customer, we adapted quickly and provided them with what they needed most. We partnered up with many stores, pharmacies and restaurants, in order to deliver essentials to citizens in Saudi Arabia during a difficult time.”

On Thursday Mueed Al Saeed, assisting vice president of Land Transport Regulation of the Public Transport Authority, said there were 16 companies including Careem licensed to operate ride-hailing services in the Kingdom.

He also said 300 million trips had been carried out during the past three years, and that there were 250,000 drivers actively working for these services.