London, UK | – Royal Dutch Shell and Saudi Aramco have announced the end of their 20-year US refinery joint venture and divided up a number of US assets between themselves.
The Motiva joint venture, formed in 1998, had operated as a 50/50 refining and marketing joint venture between the London-listed international oil giant and Saudi Arabian national oil company.
“Motiva’s performance has been transformed in the last two years. We propose to combine the assets we will retain from the joint venture with Shell’s other downstream assets in North America. This is consistent with both the group and downstream strategy to provide simpler and more highly integrated businesses which deliver increased cash and returns,” said John Abbott, Shell downstream director.
The Saudi group is to retain the Motiva name, assume sole ownership of the Port Arthur, Texas refinery, retain 26 distribution terminals, and have an exclusive licence to use the Shell brand for gasoline and diesel sales in many parts of the US.
Shell will assume sole ownership of the Norco, Louisiana refinery, the Convent, Louisiana refinery, nine distribution terminals, and Shell branded markets in Florida, Louisiana and the northeastern region.
However, Ipek Ozkardeskaya, analyst at London Capital Group, noted that investors are “showing little enthusiasm” about letting control of the biggest US refinery – Port Arthur – go to Aramco, although Shell’s share price closed up 1.61 per cent today at 1,704.5p.
Abdulrahman F Al-Wuhaib, Saudi Aramco’s senior vice president of downstream, said the joint venture has “served our downstream business objectives very well for many years”.
“However, it is now time for the partners to pursue their independent downstream goals,” he added. “Motiva’s employees will continue to be critical to fulfilling our future growth potential in the Americas, reinforcing our reliable customer service and supporting the communities where we operate. We fully support Motiva’s continuing transformation journey to become an autonomous integrated downstream affiliate.”
Motiva boss Dan Romasko said: “Motiva has benefited greatly from the nearly two decades of support and resources provided by Shell and Saudi Aramco. While the parties work towards definitive agreements, Motiva will remain focused on our growth agenda, running operations in a safe, environmentally sound and efficient manner while continuing to reliably serve our customers.”