UPDATE 2-Saudi Aramco, Shell plan to break up Motiva, divide up assets

Wed Mar 16, 2016 9:03pm EDT
 
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(Recasts, adds quotes, details about company relationship, divisive issues, previous NEW YORK)

By Kristen Hays and Erwin Seba

HOUSTON, March 16 (Reuters) - Royal Dutch Shell and Saudi Aramco announced plans on Wednesday to break up Motiva Enterprises LLC in a deal that ends a partnership of nearly two decades and hands control of the biggest U.S. refinery to the Saudi state oil giant.

News that the two energy companies will divide assets in their oil refining and marketing joint venture had been expected by many as they navigated an often-frayed relationship where their respective interests sometimes diverged.

An early sign of a pending breakup emerged last summer when Motiva announced plans to set up its own oil products trading operation separate from Shell. The desk started up in January.

The divorce also comes as the Saudi government considers selling shares in the world's largest oil firm.

Abdulrahman Al-Wuhaib, senior vice president of downstream at Saudi Aramco, said in a statement on Wednesday that the joint venture formed in 1998 served the partners' downstream business objectives "very well for many years."

"It is now time for the partners to pursue their independent downstream goals," he said.

A U.S. spokesman for The Hague-based Royal Dutch Shell said the breakup and split of Motiva's assets were consistent with Shell's plans to simplify its global portfolio.   Continued...