Page 9 - NorthAmOil Week 04 2022
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NorthAmOil INVESTMENT NorthAmOil
Source: AP
Shell confirms sale of Deer
Park refinery stake to Pemex
US-MEXICO SHELL Oil, a subsidiary of Royal Dutch Shell, and chemicals park strategy.”
confirmed last week that it had transferred its Pemex intends to use the Deer Park refinery
stake in the Deer Park refinery in Texas to PMI as a source of petroleum product supplies for
Norteamerica, a subsidiary of Mexico’s national Mexico’s domestic market. The country is cur-
oil company (NOC) Pemex. rently dependent on imported fuels, despite its
Shell and PMI Norteamerica have been part- status as an oil producer. This is partly because
ners in Deer Park Refining Ltd Partnership, the the NOC’s own refineries are operating signifi-
joint venture that owns the oil-processing plant. cantly below capacity, and Mexico’s government
In a statement dated January 20, Shell said it had has indicated that it hopes to address this prob-
finalised the sale of its 50.01% equity stake in the lem by halting crude exports by the end of next
joint venture to the Pemex subsidiary, thereby year.
raising the latter’s holdings from 49.99% to This state-driven, protectionist approach has
100%. raised eyebrows among many industry observ-
The company put the value of the deal at ers, especially since it has been accompanied by Pemex intends
$596mn and said that PMI Norteamerica had policy initiatives designed to blunt the impact
paid for its stake with a combination of cash and of reforms enacted in 2013-2014 to encourage to use the Deer
debt. It also explained that the transaction would competition in the oil and gas sector. However,
not give the Pemex affiliate any control over Deer Mexican President Andres Manuel Lopez Obra- Park refinery
Park Chemicals, a facility located adjacent to the dor is convinced that championing Pemex’s
refinery. Deer Park Chemicals will continue to interests and making certain that state-run com- as a source
be fully owned and operated by Shell Chemical, panies dominate the energy industry is the best of petroleum
another subsidiary of Shell. option.
“The completion of this sale marks the start Meanwhile, Pemex, which is carrying a debt product supplies
of a new chapter of our history in Deer Park, as portfolio of more than $100bn, is under no
we’ve worked closely with Pemex over the past small amount of financial pressure as it assumes for Mexico’s
few months to ensure a safe and responsible control of the Deer Park plant. The value of the
handover of operations for the refinery,” com- acquisition has been reported at $596mn, but domestic market.
mented Huibert Vigeveno, downstream director Bloomberg said last year that it had seen doc-
at Shell. “The team at Deer Park has been instru- uments showing that the total cost might reach
mental not only in preparing the asset for Pemex $1.6bn. The documents indicated that the NOC
operations, but also in continuing a legacy of might use around $1.6bn, including capitali-
safety and performance that dates back 92 years. sation from Mexico’s National Infrastructure
We look forward to remaining a neighbour in Fund and a bridge loan from commercial bank-
the Deer Park community and growing our ing institutions, to buy the stake and settle more
chemicals business to best meet the needs of our than $1bn of the Deer Park plant’s debts, the
customers, while advancing our global energy news agency reported.
Week 04 27•January•2022 www. NEWSBASE .com P9
