Royal Dutch Shell and Saudi Aramco have decided to break up Motiva Enterprises LLC and divide up its assets in a deal that gives the control of biggest U.S. refinery to Saudi Arabia’s oil major.
Under the proposed terms of non-binding letter of intent, Aramco will take over the Port Arthur, Texas, refinery and retain 26 distribution terminals as well as the Motiva name, the companies said in a joint statement on Wednesday.
"The Motiva joint venture with Shell 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,” Abdulrahman Al-Wuhaib, senior vice-president of downstream at Saudi Aramco, said in the statement.
It will also have an exclusive license to use the Shell brand for gasoline and diesel sales in Texas, the majority of the Mississippi Valley, the Southeast and Mid-Atlantic markets, the statement said.
Shell will assume sole ownership of the Louisiana refineries in Convent and Norco, where it also operates a chemicals plant, along with Shell-branded gasoline stations in Florida, Louisiana and the Northeastern region.
The Motiva joint venture was formed in 1998 and has operated as a 50-50 refining and marketing venture between the parties since 2002.
The break-up comes as the Saudi government considers selling shares in the world’s largest oil firm.
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