EXHIBIT 99.1
SHELL, TEXACO AND SAUDI REFINING, INC. SIGN MEMORANDUM OF
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UNDERSTANDING TO COMBINE EASTERN AND GULF COAST REFINING AND
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MARKETING OPERATIONS
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FOR IMMEDIATE RELEASE: WEDNESDAY, JULY 16, 1997.
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WHITE PLAINS, N.Y., July 16 - Saudi Aramco, Shell Oil Company, and
Texaco Inc. today announced the signing of a memorandum of understanding to
combine their Eastern and Gulf Coast U.S. refining and marketing businesses.
The new company will continue to market gasoline under both the Texaco
and Shell brands through the thousands of independent wholesalers and retailers
who bring the products to the consumer. Currently, Texaco-branded products are
marketed in this geographic area by Star Enterprise, a 50/50 joint venture
between subsidiaries of Texaco and Saudi Aramco.
The signing of this memorandum of understanding follows the recent
announcement of a similar agreement between Shell Oil Company and Texaco Inc.
to combine the major elements of their Midwestern and Western U.S. refining
and marketing activities and their total U.S. transportation, trading and
lubricants businesses.
In a joint statement Saudi Aramco President and CEO Xxxxxxxx X. Jum'ah,
Shell Oil Company President and CEO Xxxxxx X. Xxxxxxx, and Texaco Chairman and
CEO Xxxxx X. Xxxxx said, "We believe this combination of the three companies'
assets will allow us to accomplish fundamental change in the way we operate our
downstream businesses leading to improved performance and growth. The alliance
will create new opportunities for our customers, employees, vendors and the
communities in which we work and live."
Under the terms of the memorandum of understanding signed today,
Texaco, Shell, and Saudi Refining, Inc., a corporate affiliate of Saudi Aramco,
will form a limited liability company comprising their Eastern and Gulf Coast
refining and marketing businesses. The initial ownership of the new venture will
be 35 percent Shell, 32 1/2 percent Texaco and 32 1/2 percent Saudi Refining,
Inc. The percentages may be adjusted in the future according to the performance
of the assets.
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For several years, the industry has faced difficult business
conditions. Meeting the challenge of this new competitive environment requires
changing the way refining and marketing companies operate in the United States.
The parties expect the new company to be able to achieve substantial
efficiencies largely by adopting best practices of the parent companies, and
from shared management systems, business processes and support functions. These
savings are not based upon closure of refineries or other major operating
facilities. However, future decisions regarding the new company will be made on
the basis of achieving the objectives of the business plan.
Until completion of regulatory review and definitive agreements, all
Texaco, Star Enterprise and Shell downstream operations will continue to operate
separately.
The exploration, production and chemical businesses of these companies
are not included in the new company.
Shell Oil Company is a Houston-based affiliate of the Royal Dutch/Shell
Group of Companies. Texaco Inc. is based in White Plains, N.Y. Saudi Aramco is
the state-owned oil company of the kingdom of Saudi Arabia. The company's U.S.
corporate affiliate Saudi Refining, Inc. is based in Houston.
- xxx -
For more information contact: Shell Oil Company
Xxxxx Xxxxx, Xxxxx Xxxxxxxxxx 713-241-4544
Texaco
Xxxxxxx Xxxxxx 000-000-0000
Xxx Xxxxxx 000-000-0000
Xxxxxxx Xxxxxxxx 000-000-0000
Saudi Refining, Inc.
Xxxxx Xxxxx (000) 000-0000
Xxxx Xxxxx (000) 000-0000
NOTE TO EDITORS: The attached fact sheet identifies operations included in the
new company.
Additional Texaco and Shell information is available on the World Wide Web at:
xxxx://xxx.xxxxxx.xxx
xxxx://xxx.xxxxxxx.xxx
TOTAL ASSETS OF NEW COMPANY
FACT SHEET
SHELL STAR ENTERPRISE COMBINED COMPANY
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Shell Eastern Refineries Star Enterprise Refineries Refineries
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Convent, La. Convent, La.
Capacity: 230,000 BPD Capacity: 230,000 BPD
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Norco, La Norco, La
Capacity: 218,000 BPD Capacity: 218,000 BPD
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Delaware City, Del. Delaware City, Del.
Capacity: 140,000 BPD Capacity: 140,000 BPD
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Port Xxxxxx, Texas Port Xxxxxx, Texas
Capacity: 235,000 BPD Capacity: 235,000 BPD
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Total Shell Eastern Capacity: Total Star Enterprise Capacity: 605,000 Total Capacity: 823,000 BPD
218,000 BPD BPD
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Shell Eastern Percent of U.S. Star Enterprise Percent of U.S. Capacity:
Capacity: 1.4% 3.9%
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Terminals Terminals Terminals
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17 products/crude terminals 33 products terminals (own or have 50 products terminals (own or
(own or have partial interest) partial interest) have partial interest)
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Retail Marketing Retail Marketing Retail Marketing
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Approximately 4,973 Approximately 9,744 Texaco-branded Approximately 14,717 Texaco and
Shell-branded outlets in 23 outlets in 26 states. Shell-branded outlets in 00 xxxxxx.
xxxxxxx xxxxxx.
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Shell Eastern percent of Star Enterprise percent of marketshare:
marketshare: 3.6% (nationwide) 4% (nationwide)
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SOURCE: Oil & Gas Journal
