Pemex bought the remaining stake from Shell Oil Company, a subsidiary of Royal Dutch Shell plc, to completely take over the Deer Park refinery (Deer Park Refining Limited Partnership) for 596 million dollars.
An explanation to understand this transaction is in the following points:
First point
The transaction covers the sale of Shell Oil Company’s 50.005% stake in Deer Park Refining Limited Partnership.
Shell Chemical L.P. will continue to operate its 100% Deer Park Chemicals-owned facility located adjacent to the site.
Deer Park refinery
Second point
Deer Park employees will be assigned to refinery or chemical plant assets.
The employees assigned to the assets of the Refinery in the scope of the divestment will receive a job offer from Pemex effective upon closing the agreement with the transaction, and the employees assigned to the assets of the Chemical Plant will continue to be employees of Shell.
Pemex will recognize the United Steel Workers and will adopt the Collective Bargaining Agreement.
Third point
The Deer Park refinery has a crude capacity of 340,000 barrels per day.
The refinery processes crude from Mexico, Canada, United States, Africa and South America.
Products produced by the refinery include gasoline, aviation fuel, diesel fuel, ship fuel, and petroleum coke.
Fourth point
The hydrocarbon inventory will be valued at closing based on actual volumes and prevailing market prices.
The current value of the hydrocarbon inventory would range from $ 250 to $ 350 million in cash assuming current market prices and historical inventory volumes under normal operating conditions.
Fifth point
The Deer Park Refining Limited Partnership is proportionally consolidated in the results of the International Financial Reporting Standards of Royal Dutch Shell plc.
Sixth point
Why did Pemex buy the Deer Park refinery?
In our third quarter 2020 results, we outline the future of our Chemicals and Refining business.
Shell plans to focus its refining portfolio on a smaller set of core sites that are integrated with Chemicals and Trading, which we refer to as Chemical and Energy Parks.
These locations will maximize the integration benefits of conventional fuel and chemical production, while offering new low-carbon fuels and high-performance chemicals.
They also offer potential future centers for carbon sequestration.
Seventh Point
The United States will continue to be a key global manufacturing center for Shell.
Shell will maintain a significant presence in Texas through its chemical facilities in Deer Park and its activities in the Permian Basin, and in Louisiana through its integrated refining and chemicals site in Norco, its chemical plant in Geismar, assets of midstream infrastructure, branded retail presence, operations and Gulf of Mexico offices in Houston and New Orleans.
Shell will also maintain its presence in brand name wholesale agreements within the Gulf Coast region. In addition, Shell will continue to invest in its Pennsylvania chemical project.
Why did Pemex buy the Deer Park refinery?
Eighth point
The president of Mexico, Andrés Manuel López Obrador, said that at the beginning of his six-year term, six refineries were received in poor condition that are being modernized, so that in the final part of his six-year term, in 2023, the country will have eight refineries with which it is expected that they will stop buying fuels abroad.
