Royal Dutch Shell Plc and Saudi Arabian Oil Co. are ending an 18-year refining partnership as the Anglo-Dutch titan prepares to sell billions of dollars of assets and the Middle East nation’s state oil company weighs an initial public offering.

Shell will assume control of two Louisiana refineries operated by the Motiva Enterprises LLC joint venture, as well as nine fuel terminals and rights to Shell-branded markets in Florida, Louisiana and the U.S. Northeast, the companies said Wednesday in a statement. Aramco will retain the Motiva name and take ownership of the largest U.S. refinery in Port Arthur, Texas, along with 26 terminals and exclusive license to sell fuel under the Shell brand across Texas and much of the U.S. Midwest and Southeast.

Shell will get some cash from Aramco following the split, a first step in The Hague-based company’s plan to sell $30 billion of assets in three years, a spokesman said. Chief Executive Officer Ben Van Beurden has pledged to raise money from divestments to help maintain dividends and recover some of the cost of buying BG Group Plc. Aramco, the world’s biggest oil producer, is exploring plans for an IPO, that may give it a value of as much as five times that of Apple Inc., according to Bloomberg Intelligence.

David Fuller's view

The good news for those of us who own Royal Dutch Shell B (RDSB LN) is that it is determined to maintain its dividend.  It should succeed in this effort, barring a significant accident.  RDSB bottomed on 22nd January and the reversal pattern is of the V-Bottom with eventual Right-Hand Extension variety, as taught at The Chart Seminar. 

RDSB would never regain its former highs on the basis of its oil activities, in my opinion, however it might possibly do so now that it is becoming a significant participant in the natural gas business, as this oversold asset and least polluting of the fossil fuels extends its recovery. 

RDSB is now the largest position in my equity portfolio, having sold my investments in India and China back in February.  I bought it for income and have generally reinvested the dividends during market setbacks. I aim to do this once again as RDSB experiences a partial pullback during the right-hand extension phase of its base formation.