While the world has been watching either the developments of Israel’s war with Hamas in Gaza or the high-profile talks at the Future Investment Initiative (FII2023), Riyadh has been very busy in expanding its economic and financial relations with Asian partners. The well documented Pivot East by GCC countries, but Saudi Arabia in particular, as shown by the multibillion investment deals and energy contracts with China or India, is now being supported by deals between Riyadh and Seoel, South Korea. Within a time span of a week a long list of major deals, from energy, oil and gas, to maritime, high tech and other sectors have been presented. International media has been largely reporting on the $2.4 billion deal awarded by Saudi oil giant Saudi Aramco (Aramco) to South Korean giant Hyundai. The latter has been awarded a contract for a gas processing plant, as part of Aramco’s 2nd phase of the Jafurah gas project. At the same time Aramco and South Korean energy company Korea National Oil Corporation (KNOC) have signed a deal entailing the storage of 5.3 million barrels of crude oil of Aramco in South Korea. The deal also stipulates that KNOC will have a right to access the crude stored in time of emergency.
Not only energy related agreements were signed during the FII2023 between South Korea and Saudi parties. Saudi sovereign wealth fund, and owner of Aramco, signed a major joint-venture agreement with Hyundai to set up a car manufacturing plant. According to Hyundai it is expected that around $500 million will be invested in the plant, which will be producing ICE and EVs. Both parties stated that PIF will be holding a 70%, while Hyundai will hold 30%. At the same time Riyadh is building up its cooperation with China, as already was shown by the announcement before that Aramco will be taking a 10% stake in Shandong Yulong Petrochemical Co. At the start of 2023 Aramco also has acquired a 10% equity stake in China’s Rongsheng Petrochemical, which owns 51% of Zhejiang Petroleum & Chemical, operator of an 800,000 bpd integrated refinery in Zhejiang province. The main missing party the last week was India. No real deals have been announced, not even during FII2023.