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Pemex is Buying Out Shell’s Interest in Shared Texas Refinery

5/24/2021

Petroleos Mexicanos (Pemex) and Royal Dutch Shell announced in late May that they have reached an agreement for Shell to sell its interest in the long running Deer Park Refinery of Texas, which has been a 50/50 joint venture consisting of Shell subsidiary Shell Oil Company and Pemex subsidiary P.M.I. Norteamerica, S.A. Once completed, this refinery will see Pemex take over 100% ownership of the facility.

This announcement follows statements made earlier this month from Mexico’s President Manuel Lopez Obrador where he was critical of the Shell/Pemex venture, saying of this facility that “Since it was built, there have been no benefits for Mexico, barely the processing of Mexican crude.” Pemex sells heavy crude to the 340,000 barrel per day Deer Park facility via a long-term contract. Today’s announcement would seem to address that concern, as Pemex wants Mexico to become “self-sufficient in gasoline and diesel”, according to comments from Mr. Obrador on May 24.

Shell stated that this transaction is for US $596 million and is expected to complete in the fourth quarter of 2021, subject to regulatory approvals.