"Saudi Arabia Is Buying Up America's Oil Assets"

[wemay]

http://www.forbes.com/sites/ellenrwald/2...s/#46cc48decf29


Excerpt:
Quote:
Saudi Arabia is quietly amassing quite a portfolio of American energy assets. State-owned Saudi Aramco is already co-owner, with Royal Dutch Shell , of Motiva, the largest U.S. refinery. Under an already signed agreement, in April 2017, Aramco will take full ownership of the most valuable Motiva assets. Now comes news that Motiva is the leading candidate to purchase the Lyondell Basell Refinery in Houston. This would give Saudi Arabia control of two major Texas refineries proving, once again, that American energy independence is impossible.

 

[Fsharp]

So they dump a lot of oil into the market, drive the price down, buy their competitors and then reduce their oil output to drive the price back up.

 

[kjbock]

Guaranteed consumption for their oil production.

 

[Nyogtha]

The 600,000 BPD Motiva Port Arthur refinery with the lubes plant was once the crown jewel of Texaco's refining system.

After Texaco lost a big lawsuit to Pennzoil in the 1980's over Getty Oil, Texaco formed Star Enterprises as a joint venture with Saudi Arabia, to have enough cash to keep Texaco going. Then the facility was consolidated into Motiva. When Chevron bought Texaco, Shell & Saudi Arabia paid Chevron for the remaining Texaco share in the facility.

So now Pennzoil will be manufactured domestically at a refinery owned by Saudi Arabia as a legacy to its 80's lawsuit win.

This situation is nothing new - Citgo has been wholly owned by the Venezuelan state oil company PDVSA since 1990, starting with a 50% interest in 1986.

 

[Virtus_Probi]

I avoid Citgo like the plague.

 

[Nyogtha]

Me too BTW, but it's a case in point if domestic companies can't / don't run their business there are foreign companies that will step in.

 

[4WD]

What domestic company ?

 

[Nyogtha]

Originally Posted By: 4WD
What domestic company ?


Texaco was a domestic company prior to the Star Enterprises JV in 1989 as previously mentioned.

https://en.wikipedia.org/wiki/Texaco#History

Cities Service / Citgo was a domestic company prior to sale of 50%of the company to PDVSA in 1986 followed by the remainder of the company in 1990. I had an aunt who worked for Cities Service in Bartlesville, Oklahoma and later Tulsa until she passed away suddenly in the early 70's.

https://en.wikipedia.org/wiki/Citgo#History

 

[4WD]

And Joseph Dahr Jamail Jr was the King of Torts who won the lawsuit and served himself very well ...

 

[Nyogtha]

It was the era of corporate raiders and mega-lawsuits, which served the raiders and lawyers well and not much for anyone else but their cronies. This is what opened the doors for Saudi Arabia and Venezuela to get their footholds in the US domestic refining industry.

Gulf also succumbed to this but like current Texaco became owned by Chevron instead of a foreign entity.

https://en.wikipedia.org/wiki/Gulf_Oil#Demise

 

[Kawiguy454]

Is it a surprise the current administration refuses to let private companies develop and exploit energy on federal lands. That would shunt their global partners agenda to seize the energy marketplace. The vehicles used to do it are the EPA and hapless earthie minions.

A new manager with US in mind may take US a different direction.

 

[turtlevette]

Originally Posted By: Kawiguy454
Is it a surprise the current administration refuses to let private companies develop and exploit energy on federal lands. That would shunt their global partners agenda to seize the energy marketplace. The vehicles used to do it are the EPA and hapless earthie minions.

A new manager with US in mind may take US a different direction.


Trash everything to make a buck.

 

[Merkava_4]

What is Saudi Arabia gonna do with all the electric Fiats I see running around town ?

 

[Vern_in_IL]

Originally Posted By: Nyogtha
Me too BTW, but it's a case in point if domestic companies can't / don't run their business there are foreign companies that will step in.


CountryMark knows how to run their business.

 

[OVERKILL]

Originally Posted By: 4WD
What domestic company ?


ExxonMobil is still domestic at least....

 

[double vanos]

Thank heavens electric car technology is coming around to being viable. We are slowly making electricity from renewable resources, plus coal and nuclear and we won't need oil for ground transportation. Hopefully, we can make the purchases the Saudis' just made similar to buying up all the rights to the carburetor.

 

[fdcg27]

Buying an asset on someone else's turf doesn't give the level of control that some might think it does.
Aside from that, the Saudis are probably getting raped on anything they purchase since they aren't among the world's more astute businessmen and they aren't anybody's friend either, as much as they might like to think otherwise.
Also, the barriers to entry, while real, aren't insurmountable for savvy Americans willing to risk a little of their own money and take a lot of financial leverage.
The days of OPEC controlling any part of the energy market are over.
Time for the Saudis and the rest to wake up, smell the coffee and develop real economies for their nations.
No nation can survive as a one trick pony.
The Saudis apparently haven't figured this out just yet.

 

[eljefino]

Originally Posted By: Kawiguy454
Is it a surprise the current administration refuses to let private companies develop and exploit energy on federal lands. That would shunt their global partners agenda to seize the energy marketplace. The vehicles used to do it are the EPA and hapless earthie minions.

A new manager with US in mind may take US a different direction.


It's great! Gas is still cheap thanks to decreased consumption, and the fuel we stash underground within our borders for "whatever reason" will be there for our grandchildren.

 

[Johnny2Bad]

Well, this is hardly unexpected.

You buy oil from Saudi Arabia, and pay them in US Dollars.

As much as some people would like to think that a US Dollar is some kind of universal currency that can be spent anywhere on earth, the truth is somewhat more nuanced. US Dollars are accepted anywhere on earth, but to actually spend one, you have to convert it to local currency.

Now, there is an alternative. You can instead spend it where it actually is local currency, in other words, you can spend it in the USA. The way you do that is to purchase real assets ... typically Real Estate, but often US-based or US-owned corporate assets. Like Oil Refineries.

I am always amazed to see people who are somehow surprised by this ... you can only put so many dollars under the mattress before it becomes lumpy. Anytime you buy a foreign made item, you are essentially forcing the seller to buy assets back in America. So, being in the Oil Business, the Saudis stick with what they know, and buy US-based Oil assets.

 

[4WD]

And CVX ...