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Shell Oil Co. and Saudi Aramco yesterday said the Federal Trade Commission's (FTC) consent order that allows San Francisco-based Chevron Corp. to buy rival oil company Texaco Inc. is a practical way for them to buy Texaco's stake in two refining and marketing joint ventures, Equilon Enterprises LLC and Motiva Enterprises LLC.
"We have reviewed the FTC's consent order and believe that the order, in conjunction with our rights under the joint venture agreements, provides a practical framework for Shell and Saudi Aramco to complete a financially sound acquisition of the Texaco interest in Motiva and for Shell to acquire Texaco's interest in Equilon," the companies said in a joint statement.
When Chevron completes the $45-billion acquisition of Texaco, the White Plains, N.Y.-based oil company's interests in those joint ventures will be placed in a trust for them to be divested.
The FTC's consent order prevents an indefinite process by directing the trustee to complete the sale of the Texaco interests within eight months of the Chevron-Texaco merger at no minimum price, the companies said.
Motiva Enterprises is owned by the three companies and Equilon is owned by Texaco and Shell, a unit of Royal Dutch/Shell Group.
"We note that Texaco's interests in the companies will be managed by two independent trustees dedicated to promoting Equilon and Motiva as viable, competitive and ongoing businesses," Shell and Saudi Refining said in a statement. The companies called themselves "natural buyers" of the assets of the ventures.
Chevron and Texaco agreed to license the Texaco brand to Equilon and Motiva on an exclusive basis until June 30, 2003 and on a non-exclusive basis for another three years.
Shell owns 56 percent of Equilon, the owner of four U.S. West Coast refineries and a supplier of fuel to 9,000 Shell and Texaco branded outlets.
Motiva has four refineries on the East and Gulf of Mexico coasts and supplies gasoline and other fuels to 13,00 Shell and Texaco outlets. Shell owns 30 percent of Motiva and Texaco and Saudi Aramco own about 35 percent each.