Dubai — Saudi Aramco has completed the $1.2-billion acquisition of a 17% stake in South Korean refiner Hyundai Oilbank as the national oil company continues to look for refining assets to boost its refining capacity to up to 10 million b/d in the long term from around 5 million now.
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"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," Aramco said in a statement on its website Tuesday.
Oilbank has a refining capacity of 650,000 b/d.
This deal makes Saudi Aramco the second-largest shareholder in Hyundai Oilbank, after Hyundai Heavy Industries Holdings with a 74.1% stake.
Aramco is also looking to boost its refining capacity in other countries in Asia, mainly China.
In September, Aramco signed a memorandum of understanding that facilitates its planned acquisition of a 9% stake in the Zhejiang integrated refinery and petrochemical complex in China.
In February, Aramco signed an agreement to form a joint venture with NORINCO Group and Panjin Sincen to developan integrated refining and petrochemical complex in China too.
The company currently owns and has stakes in four refineries abroad with a total refining capacity exceeding 2 million b/d.
The company is also starting up a joint venture refinery in Malaysia next year, the company's senior vice president for downstream Abdulaziz al-Judaimi said in October. According to Aramco's bond prospectus released in April, the refining and petrochemical joint venture with Petronas -- the Malaysian national oil company -- collectively known as PRefChem, was supposed to start this year.
The PRefChem joint venture includes a 300,000 b/d refinery, an integrated steam cracker with capacity to produce 1.3 million mt of ethylene in Johor, Malaysia. Aramco was supposed to provide a significant portion of PRefChem's crude supply under a long-term supply agreement. The 400,000 b/d Jazan refinery in Saudi Arabia and PrefChem will help Aramco reach a gross refining capacity of 5.6 million b/d, it said in the prospectus.
Aramco also expects to close by 2021 a deal to buy a 20% stake in the oil-to-chemicals business of India's Reliance Industries, a deal that will add another 1.4 million b/d of refining capacity to the Saudi company's portfolio, Judaimi added at the time.
-- Dania Saadi, firstname.lastname@example.org
-- Edited by Jonathan Dart, email@example.com