The controversy over the slated takeover of key US port operations by a company from Dubai has the media asking about foreign involvement at ports around the country. I don't see any need to weigh in on the larger issue, but I want to point out a glaring omission in an article in the Sunday New York Times on the situation in Connecticut, "Who Is Minding the State's Ports?" They correctly reported that a company called Motiva operates portions of the ports of New Haven and Bridgeport, and that Motiva is partly owned by the Saudi national oil company, Saudi Aramco. Unfortunately, the article omits any perspective on how this came to be. A little more curiosity on the part of the reporter would have dissipated the air of concern and the implication that this arrangement was never vetted.
I wouldn't blame the article's author, if she had been confused by the complexity of the chain of transactions involved. The key lies in the historic ownership of these facilities by Texaco, hardly a foreign or obscure name. In the aftermath of the company's Pennzoil-related bankruptcy, Texaco established a joint venture with Saudi Aramco in 1988. This alliance encompassed Texaco's petroleum refining and marketing assets east of the Mississippi (more or less,) including a large network of distribution terminals along the east coast. Texaco contributed the facilities and the people; Saudi Aramco put up cash and a long-term crude oil supply. The new company was called Star Enterprise, and its formation was big news in its day.
Fast forward to 1997 and the leading edge of the industry consolidation that continues to this day. Shell and Texaco agreed to combine their US refining and marketing activities in two joint ventures, the first, called Equilon Enterprises LLC, covering the territory in which Texaco had retained 100% ownership of its downstream system, and the second, Motiva Enterprises LLC, combining the former Star Enterprise with Shell's downstream assets in the eastern half of the country. Ownership of the latter was split between Shell, Texaco and Aramco. This deal was heavily scrutinized by the FTC and the affected states. Finally, when Texaco merged with Chevron in 2001, an FTC Consent Decree required Chevron to sell Texaco's interest in these two JVs to their partners. That's how a joint venture owned by an Anglo-Dutch firm and the Saudi state oil company ended up with parts of two Connecticut ports.
Now, although I probably paid more attention to these transactions than most, having worked for Texaco throughout the period in question, I recall clearly that these deals made national headlines and attracted intense regulatory scrutiny. So a Saudi company acquired an interest in these ports, not in the dead of the night, but in a sequence of three high-profile deals, dating back two decades. I am surprised to hear that my Congressman and both US Senators seem to have been unaware of any of this.
Had the Times wished to reassure the public about the safety of the Connecticut ports, they could have pointed out that the same people have been running them since at least 1988, and that the vast majority of the personnel involved are Americans who can trace their employment back to Texaco or Shell. Does it really matter to the day-to-day operations that half the shares of Motiva are owned by the Saudis, when decisions are made either locally or at the Houston headquarters of the venture? If anything, Motiva may have a higher US content than other, more recognizably "American" firms running similar facilities, because it is constrained by its charter to operate only within the US.
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