Royal Dutch Shell and Saudi Arabian Oil Co. have signed a letter of intent to end their 18-year refining and marketing partnership in a major global deal, but it should be business as usual for the Norco Manufacturing Complex – at least for now.
Shell spokeswoman Natalie Mazey in Houston said employees will transfer with the assets or businesses. Staff at Norco and Convent will transfer to Shell and staff at Port Arthur will remain with Motiva.
Shell will assume sole ownership of the 235,000-barrel-a-per-day Norco refinery (where Shell operates a chemical plant), the Convent 235,000-barrel-per-day refinery, nine distribution terminals and Shell branded markets in Florida, Louisiana and across the Northeastern region, Mazey said.The Shell refineries have an estimated value of $4.35 billion.
NMC has 1,128 employees in Norco, a total that does not include contractors.
According to Mazey, in the proposed division of assets, Saudi Aramco also will retain the Motiva name, assume sole ownership of the Port Arthur, Texas refinery, 26 distribution terminals and have an exclusive license to use the Shell brand for gasoline and diesel sales in Texas, the majority of the Mississippi Valley, Southeast and Mid-Atlantic markets.
Shell also gets Shell-branded markets in Louisiana, Florida and the Northeastern U.S., according to the terms of the deal announced in a Shell statement.
The companies did not disclose financial details of the deal.
In Norco, Shell refines mostly offshore Gulf of Mexico oil while the Texas plant processes large quantities of Saudi oil.
Between the three refineries, Motiva said it produces some 1.1 million barrels of oil a day. Saudi Aramco is the world’s biggest oil producer.
Kammy Reece with Motiva Corporate Communications, also in Houston, said, “At the present time and until the transaction closes, Motiva and the Norco Manufacturing Complex will conduct business as usual.”
Reece added, “We are focused on delivering on our 2016 business plan, running our daily operations safely and reliably, and continuing to serve our customers and community exceedingly well. Our employees live and work in the communities where we operate and the Norco Manufacturing Complex will continue to be a valued industrial neighbor now and after the transaction is completed.”
According to a Shell spokesman, the Hague-based company is preparing to sell $30 billion of assets in the next three years and the Middle East nation’s state oil company is considering a public offering.
Chief Executive Officer Ben Van Beurden has pledged to raise money from divestments to help maintain dividends and recover some of the cost of buying United Kingdom-based BG Group , an oil and gas producer, for $50 billion.
In January, Deputy Crown Prince Mohammed bin Salman told The Economist that Saudi Arabia was considering an initial public offering for Saudi Aramco as low global oil prices continued eroding the kingdom’s finances.
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