Oil & Gas
Shell to Sell Interest in Deer Park Refinery to Partner Pemex
Royal Dutch Shell plc subsidiary Shell Oil Company has reached an agreement for the sale of its interest in Deer Park Refining Limited Partnership, a 50-50
Royal Dutch Shell plc subsidiary Shell Oil Company has reached an agreement for the sale of its interest in Deer Park Refining Limited Partnership, a 50-50 joint venture between Shell Oil Company and PMI Norteamerica SA De CV, a subsidiary of Petroleos Mexicanos or Pemex. The transaction will transfer Shell’s interest in the partnership, and therefore full ownership of the refinery, to Pemex, subject to regulatory approvals.
The consideration for this transaction is USD 596 million which is a combination of cash and debt, plus the value of hydrocarbon inventory. This transaction allows Shell to further focus its refining footprint while also maintaining integration optionality and retaining value through its Chemicals and Trading activities.
The transaction is expected to close in Q4 2021.
The transaction covers the sale of Shell Oil Company’s 50.005% interest in Deer Park Refining Limited Partnership. Shell Chemical L.P. will continue to operate its 100% owned Deer Park Chemicals facility located adjacent to the site.
Deer Park employees will be assigned to either the Refinery or Chemical Plant assets. Employees assigned to the Refinery assets in scope for divestment will be offered employment by Pemex with effect upon closing in accordance with the transaction, and employees assigned to the Chemical Plant assets not in scope for divestment will continue employment with Shell. Pemex will recognize the United Steel Workers and adopt the Collective Bargaining Agreement.
The Deer Park Refinery has a crude oil capacity of 340,000 barrels per day. The refinery processes crudes from Mexico, Canada, the U.S., Africa and South America. Products produced by the refinery include gasoline, aviation fuels, diesel fuels, ship fuel and petroleum coke.