Saudi Aramco statement on AOC sale of strategic stake to Hanjin Energy
Posted: 12 March 2007
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The Board of Directors of S-Oil Corporation, an affiliate of Aramco Overseas Company B.V. (AOC), a subsidiary of the Saudi Arabian Oil Company (Saudi Aramco), agreed to sell 31.9 million treasury shares, previously owned by Ssangyong Cement Co. Ltd., to Hanjin Energy Co. Ltd., a subsidiary of the Hanjin Group incorporated under the laws of Korea (Hanjin Energy).
Mr. Adil Al-Tubayyeb, Saudi Aramco Executive Director of Joint Venture Development & Coordination and board member of AOC who signed on behalf of AOC, said that with this partnership of one of the world’s largest logistics and shipping conglomerates, all parties are expected to derive important synergies. S-Oil will enhance its marketing capabilities by securing long-term supply arrangements of fuel products to members of the Hanjin Group, including both Korean Air Lines and Hanjin Shipping. In turn, S-Oil may also develop shipping arrangements of crude oil and petroleum products through Hanjin Shipping.
Entering into partnership through this transaction, S-Oil can achieve its long term vision to reestablish itself as a successful Korean company with a strong and reputable Korean partner.
Company sources indicated that the total transaction value will be approximately KRW 2.4 trillion (US$ 2.5 billion). This major capital transaction will further enhance the already strong financial position of S-Oil. After the closing of this transaction, S-Oil and Korean Air will be able to expand their reach to customers and provide better customer service through co-marketing and co-branding, as well as joint promotional programs. S-Oil presently supplies 20% of Korean Air’s annual oil consumption, and 30% of Hanjin Shipping’s annual oil consumption.
S-Oil is a very successful model for economic interdependency between consuming and producing nations, so this transaction will contribute positively to that goal.
AOC invested in S-Oil in 1991 and continues to support the expansion and the growth of S-Oil. With this new partnership with Hanjin Energy, the growth of S-Oil will continue.
Saudi Aramco, the parent company of AOC, has long supported Korea ’s economic development by providing a reliable and stable supply of crude oil. As a result, S-Oil has become a symbol of economic cooperation between the Republic of Korea and the Kingdom of Saudi Arabia . |
