Deer Park Refinery in Houston, Texas. Photo: Deer Park

By KELIN DILLON

On Wednesday, Dec. 22, the U.S. government approved Mexico’s state-owned oil company Petróleos Mexicanos’ (Pemex) $596 million purchase of Shell’s Texas refinery Deer Park, with the acquisition planned to be finalized within the first few weeks of 2022.

“The purchase shows a good relationship between the United States and Mexico,” said Mexican Secretary of Foreign Relations Marcelo Ebrard, displaying a letter showing the Committee on Foreign Investment in the United States’ (CFIUS) conclusion that the deal would not affect U.S. national security nor competition between the two nations, officially allowing the purchase to move forward.

The committee has determined that there is no national security concern that remains unsolved, therefore, the review of this operation has been concluded. This means that the operation has been authorized,” said the letter.

Pemex Director Octavio Romero Oropeza reaffirmed that as part of the deal, Mexico would pay off both Pemex and Shell’s existing $1.2 debt in the refinery and begin working with the refinery as “debt-free”, then detailing how the purchase’s success would help continue Mexico’s plan toward complete energy self-sufficiency within the country.

For his part, Mexican President Andrés Manuel López Obrador (AMLO) called the acquisition of Deer Park “very good news,” “historic,” and thanked U.S. authorities for helping push through the deal. AMLO then went on to discuss the 10 billion pesos the federal government allocates annually for the operational maintenance of Mexico’s refineries.

Once the purchase is complete, Deer Park will be able to process some 340,000 barrels of crude oil per day and subsequently produce 131,000 barrels of gasoline and 89,000 barrels of diesel per day for Mexico, though the refinery’s recent devaluation to “junk” grade by Big Three financial rating agency Moody’s Analytics has raised concern among experts about just how well the deal will pay off for Pemex and Mexico.

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