Linus Unah – Fourth Estate Contributor
Houston, TX, United States (4E) – Royal Dutch Shell and Saudi Arabia’s state-owned oil giant Saudi Aramco have finalized the agreement to split the assets, liabilities and businesses of Motiva Enterprises LLC, a 50/50 refining and marketing joint venture in the U.S.
Both companies said in a joint statement that the separation of the joint venture and redistribution of the assets would allow each company to focus its downstream business.
Under the deal, Saudi Aramco will take full ownership of the 600,000-barrel-per-day Port Arthur refinery in Texas, the largest oil refinery in the U.S., and 24 distribution terminals with a total storage capacity of 11.1 million barrels.
Shell will control Norco and Convent refineries in Louisiana and 11 distribution terminals, according to the joint statement released by both companies.
The Anglo-Dutch oil major said in a separate statement on Tuesday that it will receive $2.2 billion from Saudi Aramco as part of the deal.
Subject to regulatory approval, the transaction is expected to close in the second quarter of 2017.
“We view this transaction as a positive outcome of the strong and historic business of Saudi Aramco in the U.S., and see next steps to support Motiva in its ongoing role as a major refiner and a top provider of refined products and derivatives in the U.S.,” Amin H. Nasser, President and chief executive officer, Saudi Aramco, said in a separate statement.
As at 31 December 2016, Motiva’s total net debt was $3.2 billion, of which Shell will assume $0.1 billion, resulting in a deduction to the cash portion of the balancing payment of $1.5 billion.
“We are nearing completion of our preparations to support stand-alone operations upon transaction close,” Dan Romasko, Motiva President and CEO, said. “As always, we remain focused on safe and profitable operations and serving our customers exceptionally well.”
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