State-owned oil major Saudi Aramco is set to become the majority stakeholder in South Korea’s S-Oil in a deal worth $2bn.

According to news reports in South Korea, Aramco is preparing to increase its stake in the refiner by buying the vast majority of South Korea’s Hanjin Energy’s 28.4 per cent stake to add to its existing 35 per cent. Korean Air owns 96.6 per cent of Hanjin Energy.

The S-Oil refinery is one of the largest in the world, with a capacity of 580,000 barrels a day (b/d) and facilities that produce lube oil and petrochemicals. It has been in operation since 1976, but Aramco did not acquire a stake until 1992.

The majority of Aramco’s refining operations are domestic, but the oil major does own shares in refineries located in several countries. These include the US, Japan and China, as well as South Korea.