Link to article: https://www.reuters.com/markets/deals/s-oil-plans-invest-52-bln-south-korea-factory-2022-11-16/
Saudi Aramco plans to invest $7 billion in a project for the production of petrochemicals from crude oil at their South Korean affiliate S-Oil Corp’s refining complex in the port city of Ulsan. The project under the name of, Shaheen, is the company’s first commercial use of Aramco and Lummus technology to produce chemicals from crude as well as their first major investment in South Korea. Starting in 2023, Shaheen will produce up to 3.2 million tons (per year) of petrochemicals and plans to be completed by 2026. Based on the completion of the Shaheen project, S-Oil’s chemical yield could double up to 25%. Recently Asia’s petrochemical demand decreased because of China’s slower demand causing operator cuts. Chief Executive Amin Nasser said that global petrochemical demand will increase though due to Asia’s emerging economies.
7 billion dollars is a huge investment in South Korea by the Saudis because Saudi Aramco is the state-owned oil company of Saudi Arabia, meaning they’re practically investing in themselves. The increase in the production of petrochemicals in South Korea is due to the growing economy (population), thus the demand growing. Petrochemicals are typically used throughout the industry and are the mainstay of their economy. But where is this oil/gas coming from? In my opinion, it’s most likely coming from Saudi Arabia.
In class we’ve discussed the realist theory which ties back into the Saudi’s $7 billion dollar investment towards South Korea’s S-oil complex being an investment practically towards themselves. In the article it mentions that Saudi Arabia owns more than 60% of S-oil. Realist theory discusses the selfish human nature of countries stemming from their best national interests for them in this anarchic international state. This investment is so huge because it’s quite obvious the Saudi Arabians are confident in their business, this their self interest pertaining to a guaranteed economic increase. They do this for a greater sense of security in their economy, military, and general well-being of their countries international status because relevancy and longevity is important in an anarchic regime.