This article is about the Motiva oil refinery which is now the largest processor of gasoline, diesel, and many other petroleum products in the United States. This refinery is owned by Saudi Aramco and Royal Dutch Shell in a 50-50 partnership. Expanding the Port Arthur refinery in Texas is somewhat complicated during this period in time due to the fact that Riyadh (a city in Saudi Arabia) has resisted efforts to spread democracy in the region, whereas the Obama administration is resistant to the changes. Saudis have helped the United States and the global economy in many ways. Summary:
This new refinery is massive and has about 2,000 employees and contractors. The Motiva relationship is one in which the Saudis maintain some form of negotiating strength when any geopolitical issues in the Middle East may arise. It is important to note that Saudi Aramco has been and still is the world’s biggest oil company. This company has “monopoly rights over Saudi Arabia’s 260 billion barrels of proven oil reserves and the world’s fourth- largest natural gas reserves” (Krauss 2013).
Now that Motiva has increased in size, this Saudi company can surpass Exxon Mobil and establish joint ventures with China, South Korea, India, and the Netherlands. The video entitled Shell/ Motiva Port Arthur Refinery Expansion discusses the same aspects that Krauss writes about in his article. This video depicts different news stations as they break the news about America’s largest refinery in Texas. Twelve million gallons of gasoline per day will be produced. Motiva enterprises: * Refines
* Disitributes * Markets This article also relates to Punnett’s chapter: Managing Internationally: The Role of History and Geography where she discusses trading needed resources. She states that “the limited availability of certain resources means that they must be obtained where they are found”. The petroleum industry is an example of this. Brett also discusses oil, prices, and the OPEC in her book. All in all, the Motiva expansion is helping stop the decline of Saudi imports. There is one major problem: the demand for gasoline in the United States is falling due to an increase in efficient cars. Motiva exports are not worried because they will export diesel to Latin America considering this is where the market is growing. Saudi Arabia continues to supply crude into the United States which is beneficial to the American customer. From this article and from the video I have learned that the expansion of the Motiva refinery in Texas will be beneficial to both Saudi Arabia and the United States.
Works Cited Brett, Jeanne. (2007). Negotiating globally. San Francisco: Jossey-Bass. Krauss, Clifford. "Texas Refinery Is Saudi Foothold in the U.S." The New York Times. The New York Times, 05 Apr. 2013. Web. 01 Apr. 2013.
Punnett, Betty Jane (2009). Second Edition International Perspectives on Organizational Behavior and Human Resource Management. M.E. Sharpe. Article link: http://www.nytimes.com/2013/04/05/business/texas-refinery-is-saudi-foothold-in-us-market.html?pagewanted=1 Video link: http://www.youtube.com/watch?v=rk_kUmA-Zbs