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Khaled al-Otaiby, an official of the Saudi oil company Aramco, watches progress at a rig at the al-Howta oilfield near Howta, Saudi Arabia. Photo: AP Photo

Saudi Aramco buys US$1.2 billion stake in South Korean refiner Hyundai Oilbank

  • Deal amounts to a 17 per cent stake in the private South Korean company, a subsidiary of the publicly traded Hyundai Heavy Industries Holdings
South Korea

Saudi Aramco says it has reached an agreement to acquire a US$1.25 billion stake in South Korean refiner Hyundai Oilbank that would provide Saudi Arabia’s state-run oil company with a dedicated outlet for its crude to South Korea.

Aramco says the deal, announced on Monday, amounts to a 17 per cent stake in Hyundai Oilbank, a private oil refining company that is a subsidiary of the publicly traded Hyundai Heavy Industries Holdings. The refinery complex in the western coastal city of Daesan, where Hyundai Oilbank’s major facilities are located, has a processing capacity of 650,000 barrels per day.

The logo of Saudi Aramco is seen at the 20th Middle East Oil & Gas Show and Conference. Photo: Reuters

Hyundai Oilbank says the Aramco purchase was made on valuation of the business at around US$8.8 billion in market capitalisation. It comes ahead of plans for an initial public offering by Hyundai Oilbank.

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