IPIC sells stake in Korean refinery

It has been announced that Abu Dhabi is to sell its 70 percent stake in a South Korean refinery following the loss of a legal battle with Hyundai Heavy Industries. It is said that their interest in the refinery is worth up to $2.2 billion.

The International Petroleum Investment Company (IPIC), the government controlled body that is responsible for all of the emirate's foreign oil and chemical investments, made the announcement in a statement to The National newspaper. The newspaper then reported the news that the stake in Hyundai Oilbank, South Korea's fourth-largest refiner, would be sold.

It was also reported that once IPIC sells its 70 percent stake to Hyundai Heavy Industries (HHI), HHI's overall stake will become 91.1 percent.

The sale comes after an international arbitration case at the Paris-based International Chamber of Commerce last year, when IPIC was ordered to sell its stake to HHI. IPIC initially refused but a Seoul court last month ordered it to do so.

Controversy

IPIC originally acquired half of Hyundai Oilbank in 1999, but by 2006 had increased its stake in the firm to 70 percent. However IPIC caused controversy when the group attempted to sell half of their HHI stake to Hyundai's rival, the GS group.

Unsurprisingly, HHI objected to this attempted sale, leading to the legal battle that has now seen IPIC forced to sell their share.

While the sale might be a blow for IPIC, the state-owned group doesn't appear to be resting on its laurels with plans to invest heavily in five refineries at a cost of $20 billion.

IPIC is said to be eyeing refinery projects in United Arab Emirates' Fujairah, Morocco, Oman, Pakistan and Jordan. The plans include a potential investment in Jordan Petroleum Refinery Co, which is looking at a $2 billion revamp of its refinery in he Al Zarqa area.

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