South Korea’s SK Innovation Co. announced that its two affiliates have acquired a 35% stake in Best Oil Co., Myanmar’s second-largest petroleum product distributor, for KRW150 billion (USD127 million).

The latest move is aimed at expanding South Korea’s largest oil refiner’s presence in the Southeast Asian market. Last year, SK Energy bought a 5.23% stake in Vietnam’s PetroVietnam Oil Corp. These two countries are part of the 10-member regional bloc called the Association of Southeast Asian Nations (ASEAN), which is the sixth-largest vehicle market in the world. ASEAN member states boast a total population of 650 million as of 2018.

“This is a strategic investment for us to create new growth momentum by securing a stable export and trading market,” the parent company SK Innovation announced.

The two SK Innovation units — SK Energy Co. and SK Trading International Co. — will each have a 17.5% stake in the holding company of Best Oil Co.

Best Oil Co. has a 17% share of Myanmar’s petroleum product market. Myanmar’ domestic demand for petroleum products is projected to grow by an average of 10% a year until 2025.

The holding company’s subsidiaries include PT Power, a petroleum product distributor in southern Myanmar, and PSW, a terminal operator.

While Best Oil owns service stations, 85% of the company’s sales are in the wholesale segment. Its holding company owns a Singapore-registered company, Best Oil Company (BOC) PTE, which imports petroleum products directly from refineries.