Saudi Aramco signed an agreement with the Export-Import Bank of Korea, according to which the Korean bank will secure $6 billion to finance the projects of the Saudi oil giant.
The Korea Export-Import Bank announced that the signing of the framework agreement with Aramco comes in a step that may help Korean companies win contracts in Saudi Arabia.
Saudi Aramco is the main exporter of oil imports to South Korea, and it also has important business partnerships with major Korean companies, as it is the largest supplier of crude oil and the main investor in the two most important oil refineries, namely (S-Oil and Hyundai Oil Bank), according to data seen by the specialized energy platform. .
signing ceremony
The 3-year agreement was signed between the Chairman of the Board of Directors of the Korea Export-Import Bank, Yoon Hee-sung, and Aramco’s Chief Financial Officer, Ziyad Al-Morsheed, in Seoul.
The Korean bank said that the agreement is a follow-up measure to support the Middle East’s second boom, referring to the potential for promising business opportunities between the two countries, Yonhap news agency reported.
The bank noted that in the 1970s, many Koreans sent home money earned by working on construction sites in the Middle East, which officials described as the first boom in the region.
Last year, Saudi Aramco announced its intention to pump $7 billion into the largest investment in the petrochemical sector in South Korea to produce more high-value products.
Agreement details
Under the framework agreement, the Export-Import Bank of Korea will lend up to $6 billion to Saudi Aramco, which in turn will pay South Korean companies participating in projects proposed by the Saudi oil company.
The government-run bank said: “The deal can help South Korean companies win contracts in the Middle East.”
He added that out of a total of $6 billion, $1 billion has been allocated to hydrogen deals and renewable energy, according to the Korean Yonhap News Agency.
The agreement comes as the Saudi oil giant is in talks to export blue hydrogen to Asia over the next five years, with increasing reliance on clean fuels to cut emissions from many sectors.
Blue hydrogen is one of the main sources that Aramco relies on to achieve carbon neutrality for greenhouse gas emissions in scopes (1 and 2) in its fully owned and operated business facilities by 2050.
The agreement came amid expectations of lucrative business opportunities in Saudi Arabia and the Middle East, following the visit of Saudi Crown Prince Mohammed bin Salman to Seoul last November.
South Korean companies are seeking to win construction deals in NEOM city projects, which target investments worth $500 billion to develop environmentally friendly and smart cities in the Tabuk region, northwest of Saudi Arabia.
Renewable energy
On the other hand, South Korea and Uzbekistan agreed to enhance cooperation in the renewable energy sector and various new energy sectors, to enhance energy security and achieve carbon neutrality goals.
The Seoul Ministry of Industry said the agreement was reached during the inaugural bilateral energy dialogue, which was held via visual communication technology, and was attended by South Korea’s Director General for Energy Policy Cheon Young Gil and Uzbekistan’s Deputy Energy Minister Azim Israilovich Akhmad Khajiyev.
The meeting came after the two countries signed a memorandum of understanding in December 2021, which includes a call to establish a dialogue channel to strengthen relations in the field of energy.
The ministry said that during the talks, the two sides exchanged their policies related to energy and the development of renewable energy, to respond to the mounting uncertainty in global supply chains amid the Russian-Ukrainian war and climate change.
The Korean official called for his country’s companies to participate in various energy projects in Uzbekistan, and to address outstanding issues suffered by Korean companies operating there, such as accounts payable in the “Surgil” gas field project.
It is noteworthy that Uzbekistan enjoys rich natural resources, such as natural gas and uranium, and South Korea possesses advanced technologies and expertise in energy development.
The two sides plan to hold regular energy talks to work towards achieving energy security and carbon neutrality goals, Yonhap news agency reported.
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