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“Administrative Differences” are Behind the Separation of Oil Giants Aramco and Shell - ASHARQ AL-AWSAT English Archive
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Participants standing in front of Aramco’s logo on the sidelines of the Global Competitiveness Forum in Riyadh on the 25th of January, 2016 (AFP)

Participants standing in front of Aramco’s logo on the sidelines of the Global Competitiveness Forum in Riyadh on the 25th of January, 2016 (AFP)

Asharq Al-Awsat has learned from informed sources that the two universal oil giants Saudi Aramco and Royal Dutch Shell have reached a tentative agreement to divide their assets in the US company Motiva Enterprise which owns and manages the largest refinery in the United States- the Port Arthur refinery in Texas. The decision came after administrative differences caused deadlock which resulted in financial losses.

The two companies announced in a joint statement that under the proposed division of assets, Saudi Refining Inc. (SRI), an Aramco subsidiary, will retain the Motiva name, assume sole ownership of the Port Arthur, Texas refinery and retain 26 distribution terminals.

Under the agreement, Motiva Enterprise will be able to use Shell’s trade name for sales of gasoline and diesel exclusively in parts of Texas and most of the areas located in the Mississippi Valley. In addition to this, the company will be able to use Shell’s trade name in the south-eastern and eastern regions of the United States.

According to the statement, Shell will acquire the Norco refinery in Louisiana where Shell operates a laboratory for chemicals, and the Convent refinery which is also in Louisiana. It will also acquire nine fuel terminals and rights to Shell-branded markets in Florida, Louisiana and north-eastern America.

Since the announcement that the two companies are ending their 18 year old partnership, questions have intensified about the nature, causes and feasibility of this separation.