Hanjin Energy last week wrapped up the sale of its 28.4 percent stake in S-Oil Corp. to Saudi Aramco for 1.98 trillion won (U.S. $1.83 billion).
The Saudi oil company now owns 63.4 percent of the South Korean refiner, one of Koreas largest lubricant suppliers, and one of the worlds largest suppliers of Group II and III base stocks.
The share transaction was announced last week in the Finanacial Supervisory Service, a year after Aramco offered to make the purchase and six months after Hanjin Energy announced it would accept.
Aramco, the worlds largest crude oil producer, is a major supplier of crude to S-Oil, and analysts have inferred that the Saudi company wanted greater control of its customer.
S-Oil is one of the largest oil refiners in South Korea and also ranks high among domestic suppliers to the countrys lubricant market. The base oil plant at its Onsan, South Korea, refinery is the worlds largest, with capacity to make 2 million metric tons per year – most of it API Group II and III.
Aramco also holds stakes in several other base oil plants. It is a 50-50 partner with Shell in Motiva Enterprises, operator of a Port Arthur, Texas, plant that is barely smaller than S-Oils. Aramco owns 70 percent of Luberef, operator of base oil plants in Yanbu al-bahr and Jeddah, Saudi Arabia.
Hanjin Energy parent company Korean Air Lines said previously that it wanted to sell its shares in S-Oil to reduce its growing debt. KAL is a subsidiary of Hanjin Group.