Mexico Says U.S. Approves Deer Park Refinery Deal, Sees Completion in Early 2022

Reuters, December 24, 2021

The U.S. government has authorized the purchase by Petroleos Mexicanos (Pemex) of Royal Dutch Shell's controlling interest in a Texas oil refinery in a transaction that should conclude early next year, Mexico's government said Wednesday.

Mexican President Andres Manuel Lopez Obrador told a regular news conference that the U.S. government had on Tuesday approved the purchase of the Deer Park refinery stake by state-run Pemex, calling it "very good news."

"The idea is to finalize the purchase during the first weeks of 2022," Pemex Chief Executive Officer Octavio Romero said, speaking alongside Lopez Obrador.

At the same conference, Mexican Foreign Minister Marcelo Ebrard displayed a letter showing that the Committee on Foreign Investment in the United States (CFIUS) had concluded there were no unresolved national security concerns regarding the deal.

Last week, Shell said the sale of its Deer Park stake to Pemex was pending CFIUS approval.

Lopez Obrador, who backed the purchase as part of a plan to make Mexico self-sufficient in gasoline, thanked U.S. President Joe Biden for his support during the authorization process.

Shell in May disclosed an agreement to sell its 50% interest in the 302,800 barrels-per-day (bpd) Deer Park refinery outside Houston to its partner Pemex for some $596 million.

CEO Romero told the news conference that the terms of the deal had not changed since May, and that Mexico would pay off the existing debt of both Shell and Pemex in the refinery, which he said amounted to around $1.2 billion in total.

Shell confirmed the CFIUS approval in a message to Deer Park refinery employees.

"In the coming days, we will work on finalizing the closing date for the deal," the oil refinery's general manager, Guy Hackwell, told workers.

A Shell spokesperson was not immediately available to comment.

Once CFIUS completes its investigation, the White House has up to 15 days to approve or reject the recommendation.

(Reporting by Dave Graham; Additional reporting by Ana Isabel Martinez and Gary McWilliams; Editing by Bernadette Baum and David Holmes)

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