Shell and Saudi Aramco to cease partnership

OIL giants Shell and Saudi Aramco are planning to end their 18 year joint Motiva venture in the Port Arthur refinery in Texas, US.

The split will see a 50/50 division of assets in the Motiva Enterprises; however Port Arthur, the largest oil refinery in the US, will be taken over 100% by Saudi Aramco. The refinery’s capacity was expanded to 600,000 bbl/d in 2012 at a cost of US$10bn.

Shell will assume sole ownership of the Convent and Norco refineries in Louisiana with a combined capacity of 465,000 bbl/d. Shell already operates a chemical plant close by and will consolidate its distribution assets to eastern US. The move comes as Shell seeks to cut costs in the wake of the oil price drop and its US$50bn purchase of BG Group.

John Abbott, downstream director at Shell, said “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 assets in North America.”

Saudi Aramco said it planned to retain the current staff at Port Arthur refinery.

Abdulrahman Al-Wuhaib, senior vice president at Saudi Aramco, said “The Port Arthur refinery will advance Saudi Aramco’s integration strategy through supply and trading, refining and fuels marketing, chemicals and base oils. Motiva’s employees will continue to be critical to fulfilling our future growth in the Americas.”

The companies said they plan to disclose more details in a future statement.