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S-Oil CEO Nasser Al-Mahasher, center, with S-Oil staff. Courtesy of S-Oil

Saudi Aramco will spend $2 billion for a majority share of  South Korea refiner S-Oil, according to reports.

Aramco, the Saudi state oil company, already holds 35 per cent of the Korean company.

It is buying nearly all of Hanjin Energy’s 28.4 per cent stake, Nasser Al Mahasher, the chief executive of S-Oil, told Korea’s Maeil Business Newspaper.

Hanjin is 96.6 per cent owned by Korean Air.

Saudi Aramco supplies to South Korea nearly all of the 600,000 barrels per day of crude that S-Oil processes.

Aramco bought 35 percent of S-Oil in 1992. It agreed last year to a 20-year deal to supply crude oil to the refiner, “an unusual agreement in a field where one-year terms are more common. Long-term deals are typically reserved for natural gas,” the National said.

In December, Korean Air said it hoped to raise $3.2bn to cut debt through the sale of 30 million shares of S-Oil held by Hanjin Energy.