EXHIBIT 99.1
SHELL AND TEXACO SIGN MEMORANDUM OF UNDERSTANDING TO COMBINE
U.S. REFINING, MARKETING, TRANSPORTATION, TRADING
AND LUBRICANTS OPERATIONS
Agreement Expected Soon Among Texaco, Shell and Saudi Refining Inc. to Combine
U.S. Eastern Refining and Marketing Operations
FOR RELEASE: TUESDAY, MARCH 18, 1997.
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WHITE PLAINS, N.Y., March 18 - Shell Oil Company and Texaco Inc. today
announced the signing of a memorandum of understanding 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. 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.
The two companies also announced that they and Saudi Refining Inc.
(SRI) have made significant progress in discussions to combine their eastern
U.S. refining and marketing businesses. They are very optimistic that an
agreement will be reached in the second quarter of 1997.
In making the announcement Shell Oil Co. President and CEO Xxxxxx X.
Xxxxxxx said, "There is a powerful case for fundamental change in the way
petroleum refining and marketing companies operate in the United States. For
several years, the industry has faced difficult business conditions requiring
increased efficiencies. This initiative will create new opportunities for our
customers, employees, vendors and the communities in which we work and live."
Texaco Chairman and CEO Xxxxx X. Xxxxx added, "An alliance of Texaco's
and Shell's downstream operations is a major step toward much needed change. By
uniting the complementary strengths of these organizations, we will create a new
entity with economic potential far greater than the sum of its parts. The result
will be a more competitive company with the ability to create long-term jobs,
greater value for both brands, reliable sources of quality products at
competitive prices and the best possible returns for our shareholders."
Memorandum of Understanding to Form New Company
Under the terms of the memorandum of understanding signed today, Texaco
and Shell will form a limited liability company comprising their midwestern and
western refining and marketing activities and nationwide transportation and
lubricants businesses. Shell will have 56 percent ownership and Texaco will hold
44 percent of the new company, which is expected to be formed as soon as
practical following regulatory review and the signing of a definitive agreement.
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The exploration, production and chemical businesses of these companies
are not included in the new company.
The new company expects to be able to achieve substantial efficiencies
largely by adopting best practices of both companies, and from shared management
systems, business processes and support functions. These savings are not
contingent 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.
Messrs. Xxxxxxx and Xxxxx emphasized that the philosophy underpinning
the venture is to improve performance and growth opportunities in the United
States. As the new company structure is established there may be some reduction
in workforce during the transition, but the expectation is that net job creation
will ultimately result from long-term growth opportunities generated by the new
venture.
Both Texaco and Shell have agreed to the strategic importance of
establishing a new company that will be a leader in diversity, which will
embrace inclusion, openness and equal opportunity for all employees and business
partners. As part of establishing the new company, comprehensive employment and
business partnering initiatives will be developed that are aligned with its
business objectives.
Progress on Establishing a U.S. Eastern Refining and Marketing Company
SRI, Texaco and Shell have made significant progress in discussions
toward a separate memorandum of understanding to combine Star Enterprise (a
50/50 joint venture between SRI and Texaco in the eastern U.S.) with Shell's
eastern U.S. refining and marketing business. They anticipate that an
announcement will be made soon.
Until completion of regulatory review and definitive agreements, all
Texaco, Star Enterprise and Shell downstream operations will continue to operate
separately.
Shell Oil Co. is a Houston-based affiliate of the Royal Dutch/Shell
Group of Companies. Texaco Inc. is based in White Plains, N.Y. SRI is a Houston-
based affiliate of Saudi Aramco.
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For more information contact: Shell Oil Co. Media Relations (000) 000-0000
Xxxxx Xxxxx, Xxxxx Xxxxxxxxxx
Texaco Media Center (000) 000-0000
NOTE TO EDITORS: The attached fact sheet identifies operations included in the
new company.
Additional Texaco information is available on the World Wide Web at:
xxxx://xxx.xxxxxx.xxx
TOTAL ASSETS OF NEW COMPANY
FACT SHEET
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TEXACO ASSETS SHELL ASSETS ASSETS OF NEW COMPANY
----------------------------------------- --------------------------------------- ------------------------------------------
Texaco Refineries (4) Shell Refineries (4) New Company Refineries (8)
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
Anacortes, Wash. Anacortes, Wash.
Capacity: 136,000 bpd Capacity: 136,000 bpd
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----------------------------------------- --------------------------------------- ------------------------------------------
Martinez, Calif. Martinez, Calif.
Capacity: 155,000 bpd Capacity: 155,000 bpd
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El Dorado, Kan. El Dorado, Kan.
Capacity: 100,000 bpd Capacity: 100,000 bpd
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
Wood River, Ill. Wood River, Ill.
Capacity: 271,000 bpd Capacity: 271,000 bpd
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
Los Angeles, Calif. Los Angeles, Calif.
Capacity: 92,000 bpd Capacity: 92,000 bpd
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
Anacortes, Wash. Anacortes, Wash.
Capacity: 108,000 bpd Capacity: 108,000 bpd
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
Bakersfield, Calif. Bakersfield, Calif.
Capacity: 58,000 bpd Capacity: 58,000 bpd
----------------------------------------- --------------------------------------- ------------------------------------------
Odessa, Tx. Odessa, Tx.
Capacity: 28,000 bpd Capacity: 28,000 bpd
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----------------------------------------- --------------------------------------- ------------------------------------------
Total Texaco Capacity: Total Shell Capacity: Total Combined Refinery
386,000 bpd 562,000 bpd Capacity: 948,000 bpd
----------------------------------------- --------------------------------------- ------------------------------------------
Texaco Percent of U.S. Capacity: Shell Percent of U.S. Capacity:
2.5% 3.6%
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Terminals Terminals Terminals
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
19 crude oil and products terminals 57 crude oil and products 76 crude oil and products terminals
(own or have partial interest) terminals (own or have partial (own or have partial interest)
interest)
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Retail Marketing Retail Marketing Retail Marketing
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
Approximately 6,735 Texaco-branded Approximately 4,477 Shell-branded Approximately 11,212 branded outlets
outlets in 24 states. outlets in 19 states. in 28 states.
----------------------------------------- --------------------------------------- ------------------------------------------
Texaco percent of marketshare in joint Shell percent of marketshare in joint Total combined percent of marketshare in
venture area: 6% venture area: 8% joint venture area: 14%
----------------------------------------- --------------------------------------- ------------------------------------------
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Pipeline Pipeline Pipeline
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
Ownership interest in approximately Ownership interest in approximately
30,000 miles of pipeline throughout the 15,600 miles of pipeline throughout
United States the United States
----------------------------------------- --------------------------------------- ------------------------------------------
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Lubricants Plants (5) Lubricants Plants (5) Lubricants Plants (10)
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
River Rouge, MI River Rouge, MI
Capacity: 7,300 bpd Capacity: 7,300 bpd
----------------------------------------- --------------------------------------- ------------------------------------------
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Xxxx Xxxx, XX Xxxx Xxxx, XX
Capacity: 9,500 bpd (2 trains) Capacity: 9,500 bpd (2 trains)
----------------------------------------- --------------------------------------- ------------------------------------------
Charleston, SC Charleston, SC
Capacity: 8,250 bpd Capacity: 8,250 bpd
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TEXACO ASSETS SHELL ASSETS ASSETS OF NEW COMPANY
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
Lubricants Plants cont. Lubricants Plants cont. Lubricants Plants cont.
----------------------------------------- --------------------------------------- ------------------------------------------
----------------------------------------- --------------------------------------- ------------------------------------------
Martinez, CA Martinez, CA
Capacity: 5,000 bpd Capacity: 5,000 bpd
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Galena Park, TX Galena Park, TX
Capacity: 8,600 bpd Capacity: 8,600 bpd
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Wood River, IL Wood River, IL
Capacity: 8,300 bpd (2 units) Capacity: 8,300 bpd (2 units)
----------------------------------------- --------------------------------------- ------------------------------------------
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Los Angeles, Calif. Los Angeles, Calif.
Capacity: 5,500 bpd Capacity: 5,500 bpd
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Carson, Calif. Carson, Calif.
Capacity: 2,300 bpd Capacity: 2,300 bpd
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Norfolk, Va. Norfolk, Va.
Capacity: 4,100 bpd Capacity: 4,100 bpd
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Metairie, La. Metairie, La.
Capacity: 3,300 bpd Capacity: 3,300 bpd
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