Mexico Acquires One of the Largest US-Owned Refineries

The president of Mexico, Andrés Manuel López Obrador, informed this Wednesday that the United States government authorized the sale to Petróleos Mexicanos (Pemex) of the remaining shares held by the Shell consortium to acquire the Deer Park refinery, with which the country takes a significant step in its strategy to be self-sufficient in fuels by the end of 2023.

In his usual press conference from the National Palace, the head of state valued the event as historic and thanked U.S. President Joe Biden for his confidence in Pemex to acquire the plant located in Houston, Texas.

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López Obrador assured that with this plant plus the Dos Bocas refinery (Tabasco State) and the one in Tula (Hidalgo), "we are increasing our production capacity by around 700,000 barrels per day."

He pointed out that an average of 10 billion pesos of investment (close to 482 million dollars) is being allocated to rehabilitate the six existing refineries nationwide.

He added that crude oil production is increasing and it is expected that by 2022 the country will have a capacity of 1.2 million barrels per day, which together with the 700,000 already mentioned will place Mexico in a position to produce all the fuel for internal consumption demanded by its economy.

He explained that this self-sufficiency capacity will contribute "to maintain low prices in gasoline, diesel and other products," he highlighted.

He valued that these steps represent "a very important turn in oil policy", and questioned the fact that the country has not built a new refinery in the last 40 years, "always with the lie that refining was not a business," he said.

During the press conference, the CEO of Pemex, Octavio Romero Oropeza, specified that the purchase of the plant began in October 2020, when an initial offer was made to Shell. He added that last May the agreement for the sale and purchase was signed, which was conditioned to the approval of the U.S. Government, which has already taken place.

Previously, the Secretary of Foreign Affairs, Marcelo Ebrard, presented the letter from the U.S. investment committee, subordinated to the Treasury Department, which accredits the validity of the operation.

Deer Park has a refining capacity of 340,000 barrels per day. According to specialized sources, it ranks 16th in the ranking of crude oil processing capacity among the 129 existing refineries in the U.S. Its infrastructure allows distribution through ships, pipeline and railroad network.

Although the purchase of the package of shares in Shell's hands implies the expenditure of 596 million dollars, the Mexican government will invest a total of $1.192 billion dollars to acquire it free of debt.