Mexico City, Mexico — On Monday, Pemex announced it bought Shell’s stake in the Texas Deer Park Refinery. With this, the state oil company, which already had a 50 percent stake through its subsidiary PMI North America, will now have full control.
President Andrés Manuel López Obrador also announced the acquisition, which he said, amounted to $596 million USD.
“This decision is part of Pemex’s new business policy proposed by the president of Mexico which consists of achieving in the short term, to produce all the fuels that the country requires for which six refineries of the National System of Refining, the new Dos Bocas refinery is being built.”
“The reconfiguration of Tula will be restarted and, through this operation, full ownership of the Deer Park refinery is taken and, with it, control and operation,” Pemex reported through a statement.
Pemex acquired its stake in the Houston refinery in 1993 and partnered with Shell to process Maya crude. Since then, it has been operated and managed by Shell and the profits have been reinvested or shared between the partners.
“Shell did not plan to commercialize its interest in the Deer Park Refinery. However, following an unsolicited offer from Pemex, we have reached an agreement to transfer our interest in the partnership to them,” said Huibert Vigeveno, Shell Downstream director.
“Pemex has been our strong and active partner in the Deer Park Refinery for almost 30 years, and we will continue to work with them in an integrated manner through our on-site chemical facility, which Shell will retain,” he added.
Shell noted that the consideration is a combination of cash and debt plus the value of the hydrocarbon inventory, which will be valued at closing based on actual volumes and prevailing market prices.
“The current value of the hydrocarbon inventory would range between $250 and $350 million in cash assuming current market prices and historical inventory volumes under normal operating conditions,” he explained.
The refinery operates as Deer Park Refining Limited Partnership, which had a 50-50 stake between Anglo-Dutch Shell Oil Company and Petróleos Mexicanos. The refinery has the capacity to process 340,000 barrels per day, the same as Mexico’s Dos Bocas.