On May 1, 2017, Matt Egan writes on CNN Money:
America’s largest oil refinery is now fully owned by Saudi Arabia.
Saudi Aramco, the kingdom’s state-owned oil behemoth, took 100% control of the sprawling Port Arthur refinery in Texas on Monday, completing a deal that was first announced last year.
Port Arthur is considered the crown jewel of the US refinery system. The Gulf Coast facility can process 600,000 barrels of oil per day, making it the largest refinery in North America.
Aramco previously owned 50% of Port Arthur through a joint venture co-owned with Royal Dutch Shell (RDSA) called Motiva Enterprises.
But the two oil giants had a rocky relationship and reached a deal in March 2016 to separate their assets. Shell put out a statement on Monday confirming the “completion” of that break-up.
In addition to Port Arthur, Aramco is acquiring full ownership of 24 distribution terminals. Aramco also gets the exclusive right to sell Shell-branded gasoline and diesel in Georgia, North Carolina, South Carolina, Virginia, Maryland, the eastern half of Texas and the majority of Florida.
Related: Trump’s energy plan isn’t a game-changer
Aramco’s deal allows the oil giant to shore up one of its best customers — the US — ahead of next year’s planned IPO. Now that it controls the largest American refinery, Aramco can send more Saudi crude into the US for refining to sell to North American drivers.
Saudi Arabia is already America’s second-largest source of crude, behind only Canada. The US imported 1.3 million barrels of Saudi crude a day in February, up 32% from last year, according to the Energy Information Administration.
Saudi Arabia is hoping the Aramco IPO will be valued at a stunning $2 trillion. The kingdom continues to grapple with low oil prices and a bloated budget, making it critical that the Aramco IPO goes off without a hitch. Saudi Arabia, the largest oil exporter in the world, dramatically slashed taxes on Aramco in March in an effort to quell concern about the oil giant’s valuation.
Related: Saudi Arabia reverses pay cuts for state workers
Even as Saudi Arabia extends its reach in the US, the Trump administration has pushed for American energy independence by unleashing the domestic energy industry. Trump said in a May 2016 speech that he wants to bring about independence from “our foes and the oil cartels.”
Trump also threatened before he was elected to halt imports of oil from Saudi Arabia and other Arab countries if they didn’t commit ground troops to fight ISIS.
After Trump was elected, Saudi energy minister Khalid al-Falih later warned that blocking the kingdom’s crude could backfire.
“Trump will see the benefits and I think the oil industry will also be advising him accordingly that blocking trade in any product is not healthy,” Falih told the Financial Times in November.
Despite that rhetoric, relations between the US and Saudi Arabia appear to have improved under Trump. Saudi Arabia’s powerful deputy crown prince Mohammed bin Salman met with Trump in the Oval Office in March, a meeting heralded by the kingdom as an “historic turning point” between the two countries.
Gary Reber Comments:
What should have occurred is the employees of the Port Arthur refinery should have purchased the refinery using an Employee Stock Ownership Plan (ESOP) modeled in the form of a buy-out, instead of allowing a foreign government (Saudi Arabia) to buy-out the American owners of Port Arthur. This transaction should have occurred, even it it require a loan guarantee by the federal government.
Unfortunately, our leaders are brainless! They are allowing the wholesale sell-off our manufacturing productive infrastructure to foreigners instead of providing a financial system that empowers American workers and other citizens to acquire OWNERSHIP of productive capital assets put up for sale.
It is not difficult to structure interest-free financial mechanisms by which EVERY child, woman, and man, can acquire personal OWNERSHIP interests in self-liquidating capital assets, whether old or new productive capital assets. It is also not difficult to structure security collateral in the form of commercial capital credit insurance and reinsurance (ala the Federal Housing Administration concept) as a replacement for past savings (equity) insurance to guarantee loan risks; otherwise banks and lending institutions will not make the loans, and the system will continue to limit access to capital acquisition to those who already own capital — the rich.
It is absolutely unbelievable that our leaders are so dumb; OR they really do not want to enrich ordinary Americans and ONLY want to further enrich the already wealthy capital ownership class.
For solutions see the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/, http://www.cesj.org/wp-content/uploads/2014/02/jtw-graphicoverview-2013.pdf and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.
See Monetary Justice at http://capitalhomestead.org/page/monetary-justice.
Sure the Capital Homestead Act (aka Economic Democracy Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/.
