SEOUL (Reuters) – State-owned Saudi Aramco plans to take a position as much as $1.6 billion for a virtually 20 % stake in South Korean refiner Hyundai Oilbank, increasing its foothold in certainly one of its largest Asian patrons of crude oil.
FILE PHOTO: Logo of Saudi Aramco is seen on the 20th Middle East Oil & Gas Show and Conference (MOES 2017) in Manama, Bahrain, March 7, 2017. REUTERS/Hamad I Mohammed/File Photo
Saudi Aramco is already the most important shareholder in South Korea’s No.three refiner, S-Oil Corp, with a 63.41 % stake, and the most recent deal ought to assist Aramco increase crude oil gross sales to Hyundai Oilbank, the South’s smallest refiner by capability.
Saudi Arabia is the highest crude oil provider to South Korea, the world’s fifth-biggest importer.
In 2018, South Korea imported 323.17 million barrels of crude from the dominion, or 885,408 barrels per day (bpd), in keeping with knowledge from Korea National Oil Corp.
Saudi Aramco’s chief govt advised Reuters in November that it deliberate to increase its market share in Asia — together with China, India, Malaysia and Indonesia — and Africa.
Saudi Aramco stated it plans to purchase a stake of as much as 19.9 % of Hyundai Oilbank from Hyundai Heavy Industries Holdings, which now owns 91.13 % of Hyundai Oilbank.
“Saudi Aramco seems to be boosting investments in downstream projects ahead of an initial public offering,” stated Lee Dong-wook, an analyst at Kiwoom Securities.
Saudi Energy Minister Khalid al-Falih stated in early January that the state oil big will probably be listed by 2021.
Aramco, the world’s largest crude producer, plans to extend funding in refining and petrochemicals in a bid to chop its reliance on crude as demand for oil slows.
Hyundai Oilbank has a complete of 650,000 barrels per day of refining capability within the southwestern metropolis of Daesan and likewise goals to increase its petrochemical enterprise.
In May final yr, it introduced plans to construct a 2.7 trillion received petrochemical plant with South Korea’s Lotte Chemical.
“RECONSIDER” HYUNDAI OILBANK IPO
Saudi Aramco plans to worth Hyundai Oilbank at 10 trillion received, or 36,000 received per share, Hyundai Heavy Industries Holdings stated in an announcement.
An individual acquainted with the matter stated the corporate plans to supply a reduction of 10 % to Saudi Aramco in a block deal that can require board approval from each companies.
News of the stake sale drove up shares of the mum or dad firm by as a lot 6.6 %.
Hyundai Heavy Industries Holdings additionally stated it deliberate to “reconsider” the inventory market itemizing of the refinery arm after finishing the stake sale, presumably this yr.
Hyundai Oilbank, which had aimed to record on South Korea’s inventory alternate in 2018, delayed the plan till this yr attributable to regulatory scrutiny of its stability sheet.
The holding firm, which additionally consists of shipbuilder Hyundai Heavy Industries, stated it will use the funds from the Oilbank deal to spend money on new companies and enhance its monetary well being.
The shipbuilding agency is a part of a three way partnership with Saudi Aramco and others to construct a shipyard on Saudi Arabia’s jap coast.
Reporting by Hyunjoo Jin and Jane Chung; Additional reporting by Joori Roh; Editing by Clarence Fernandez and Darren Schuettler