ARAMCO TO PAY SHELL US$2.2B FOR MOTIVA
Deal will also result in takeover of largest US refinery
SAUDI Arabian Oil Co (Aramco) will pay Royal Dutch Shell US$2.2 billion (RM9.8 billion) including debt to finalise the breakup of a 19-year refining partnership known as Motiva Enterprises LLC.
Aramco’s Saudi Refining unit will take full ownership of the Motiva Enterprises name and legal entity, including the largest refinery in the United States at Port Arthur in Texas, and 24 distribution terminals, according to a joint statement on Monday.
Shell will take sole ownership of the Norco and Convent refineries in Louisiana and 11 distribution terminals.
Aramco will make a US$2.2 billion balancing payment, subject to adjustments including working capital. The payment is split between debt and cash. Aramco will assume nearly all of Motiva’s US$3.2 billion of net debt, including US$1.5 billion of Shell’s share.
A cash payment would cover the balance, said Shell in a separate statement.
“Motiva is a strong competitor among US refiners, and we value this important link with the dynamic US energy sector,” said Abdulaziz Al-Judaimi, senior vice-president of downstream at Aramco, in the joint statement.
The transaction was subject to regulatory approval and expected to close in the second quarter of this year, said the companies.
Under the agreement, Motiva will have the right to sell Shellbranded petrol and diesel in Georgia, North Carolina, South Carolina, Virginia, Maryland and Washington, as well as the eastern half of Texas and most of Florida.
Shell’s markets will be Alabama, Mississippi, Tennessee, Louisiana, the Florida panhandle, and the Northeastern region of the US.