Announced Wednesday, the agreement calls for the worlds largest crude oil supplier to $1.6 billion for up to 19.9 percent of Hyundai Oilbank from South Korean Hyundai Heavy Industries Co., which currently owns 91 percent of the refiner.
Oilbank is a partner in Hyundai Shell Base Oil, a 50-50 joint venture with Shell that operates a 1.25 million metric ton per year API Group II base oil plant in Daesan, South Korea.
The stock purchase by Aramco must be approved by the boards of Aramco and Hyundai Heavy Industries.
Aramco already owns several base oil plants or stakes in them. It wholly owns Motiva, operator of a 2 million t/y plant at Port Arthur, Texas, United States, since 2017 when it bought out Shells stake in what had been a 50-50 joint venture. Aramco is majority owner in Luberef, a 70-30 JV with Jadwa Investments that operates two Saudi Arabian plants with combined capacity to make 358,000 t/y of Group I and 708,000 t/y of Group II.
Finally, Aramco owns 63.4 percent of S-Oil, another South Korea refiner that operates a 2.1 million Group II and III plant in Onsan, South Korea.
An indirect interest in the Daesan base oil plant is not among Aramcos main motivations for entering the agreement. The company, owned by the Saudi government, has been seeking investments across Asia. A number of the companies it has taken stakes in buy significant amounts of its crude.