Shell and Saudi Aramco to split downstream joint venture

Oil giants Royal Dutch Shell and Saudi Aramco have agreed to separate the assets, liabilities and businesses of their Motiva Enterprises downstream joint venture.

SOPC Holdings East, a US downstream subsidiary of Shell, and Saudi Refining, subsidiary of Saudi Arabian Oil Company or Saudi Aramco, have signed binding definitive agreements to separate the assets, liabilities and businesses of Motiva, their 50/50 joint venture, subject to regulatory approval.

A payment of $2.2bn, subject to adjustments including for working capital, has been agreed between the companies, which will include Saudi Refining assuming more than its 50% share of Motiva's net debt on completion of the deal, which is expected to close in the second quarter of 2017, and a cash payment for the balance.

At the end of last year, Motiva had $3.2bn of net, of which Shell will assume $100m due to a deduction to the cash portion of the balance payment of $1.5bn.

Shell said that as as a result of the deal, no material effect is expected on its balance sheet.

Shares in were up 0.28% to 2,144.50p at 0922 GMT.