(EnergyAsia, July 8 2014, Tuesday) — Saudi Aramco said its subsidiary, Aramco Overseas Company BV (AOC), will become the new majority owner of South Korea’s S-OIL Corporation when it completes its proposed buy-out of the Hanjin Energy Company’s entire 28.4% stake for nearly 1.983 trillion won. (US$1=1,010 won).

The Saudi state-owned firm will raise its ownership interest in S-OIL from 34.99% to 63.4% upon clearance of regulatory and shareholder approvals by end-August.

Hanjin Group, the owner of Hanjin Energy through another subsidiary, Korean Air, said the sale of the country’s third largest oil refining company would improve the group’s financial position. S-OIL’s 669,000 b/d of refining capacity places it behind SK Energy and GS Caltex in size, and ahead of Hyundai Oilbank.

“This transaction underscores Saudi Aramco’s confidence in the South Korean economy and its strategy to enhance its presence in the growing Asian markets and AOC’s commitment to S-OIL growth,” said Khalid A. Al-Falih, Saudi Aramco President and CEO. The Saudi firm supplies nearly all of the crude feedstock required by the Korean refiner.

Apart from providing support services to Saudi Aramco, AOC helps operates the Saudi giant’s global oil, gas and chemicals enterprises through its network of investments and joint ventures. AOC bought its 34.99% stake in S-OIL in 1991.