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Fuel demand in Mexico: Deer Park road to self-sufficiency

The total acquisition of Deer Park that the government of Mexico intends is part of its objective of self-sufficiency to supply the demand for fuel in Mexico.

Since 1993, through PMI-NASA, a subsidiary of Pemex, the latter company has had a 49.99% stake in a limited partnership with Shell Oil Company, which owns a refinery located in Deer Park, Texas.

The refinery has the capacity to process 340,000 barrels of crude per day.

Under the Deer Park limited partnership agreement, Shell Oil Company, as operator, is responsible for determining raw material requirements.

In addition, Shell Oil Company and PMI-NASA each provide 50% of the refinery’s crude oil input and own 50% of the refinery’s output.

So this agreement is limited to the specific purpose of operating the Deer Park refinery.

Fuel demand

On May 24, 2021, Pemex’s Board of Directors approved the investment for the acquisition of Shell Oil Company’s stake in Deer Park Refining Limited Partnership.

Also on that date, Pemex reached an agreement to acquire the 50.01% stake in Deer Park Limited Partnership currently in the hands of Shell Oil Company, with an estimated price of 596.0 million dollars, so that at closing Pemex would own 100 % of the Deer Park refinery.

The acquisition of the Deer Park refinery will be fully funded by the Mexican government and the deal is expected to close in December 2021, subject to regulatory approvals and other customary closing conditions.

For now, this Wednesday, director of Petróleos Mexicanos, Octavio Romero Oropeza commented that with this purchase self-sufficiency with respect to the demand for fuel in the country is intended and that the closing of the transaction depends only on the permission of the United States government, an aspect in which it is outlined that, according to him, there will be no problem.

 

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