Obviously S-Oil is an important player in the global base oil market, Stephen B. Ames, principal of SBA Consulting in Pepperpike, Ohio, U.S., told Lube Report Asia. But I would not expect this to cause any significant change in how they operate.

Saudi Aramco currently owns a 34.1 percent stake in S-Oil, a Seoul-based company that operates one of the worlds largest oil refineries in Ulsan, South Korea. Hanjin Energy owns 27.4 percent, and the rest is owned by Korean stockholders. In December, Hanjin Energy said it wanted to sell its share to raise funds for parent company Korean Airlines.

Maeil Business Newspaper was the first of several news outlets to report this month that Aramco has agreed to buy almost all of Hanjins stake. Maeil cited a comment by S-Oil Chief Executive Officer Nasser al-Mahasher. S-Oil and Saudi Aramco both declined to comment this week.

S-Oils Ulsan refinery includes a base oil plant with capacity to make 1.9 million metric tons per year of API Group II and III stocks. Aramco also has stakes in two other joint ventures that operate base oil plants. Aramcos Saudi Refining Inc. owns 50 percent of Motiva Enterprises, which operates a 2 million t/y plant in Port Arthur, Texas, U.S. Royal Dutch Shell owns the other half of Motiva. Aramco owns 70 percent of Luberef, operator of Group I base oil plants in Jeddah and Yanbual-bahr, Saudi Arabia. Jadwa Investment owns the other 30 percent of Luberef.

Ames noted that Aramco tends to leave base oil operations to its plant managers.

Theyve always been kind of a silent partner, he said. It appears that their main concern is that they want to have a destination where they can upgrade their crude oil.

Saudi Aramco Base Oil Stakes

1 Purchase of Hanjin stock would raise Aramcos stake to approximately 61 percent.

Source: LubesnGreases