Sinochem, however, still needs approval from Beijing to seal the deal.

According to an Inchon Oil insider, “The two sides signed the final contract Friday. The court approved the deal on Thursday [and its] endorsement was necessary for the conclusion of the takeover deal as Inchon Oil had been under court receivership since it went bankrupt in August 2001.”

While no further details were made available by the source, Inchon Oil and Sinochem, the deal was confirmed by the Korea Development Bank (KDB), Inchon Oil’s main creditor.

“Sinochem has acquired Inchon Oil for 635 billion won (US$552 million). A contract was signed on Friday [but] the sale price was lowered a bit after due diligence,” said the KDB. Sinochem had earlier offered 644 billion won (US$560.2 billion) in May in a preliminary agreement.

Inchon Oil has a capacity of 275,000 bpd but has been operating at 30% since its bankruptcy. It sold 32.9 million bbl of refined oil products domestically in 2003 but has struggled to go beyond a market share of 4.3%. It also exported 7.2 million bbl last year.