THE HAGUE, Netherlands, May 24, 2021 / PRNewswire / – Shell Oil Company, a subsidiary of Royal Dutch Shell plc, has entered into an agreement to sell its stake 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 stake in the partnership, and therefore full ownership of the refinery, to Pemex, subject to regulatory approvals.
“Shell did not intend to market its stake in the Deer park refinery; however, following an unsolicited offer from Pemex, we reached an agreement to transfer our stake in the partnership to them, ”said Huibert Vigeveno, Downstream Director of Shell. “Pemex has been our strong and active partner at the Deer Park Refinery for almost 30 years, and we will continue to work with them in an integrated fashion, including through our on-site chemicals plant, which Shell will retain. Above all, we remain committed to the well-being of our employees and will work closely with Pemex to ensure continued prioritization of safe operations. We are proud of our 90 year history as an operator and neighbor at Deer park and we will continue to play an active role in the community ”.
The counterpart of this transaction is $ 596 million which is a combination of cash and debt plus the value of hydrocarbon stocks. This transaction allows Shell to further focus its refining footprint while maintaining the optionality of integration and retaining value through its chemicals and trading activities.
The transaction is expected to close in the fourth quarter of 2021.
Notes to Editors
- The transaction involves the sale of Shell Oil Company’s 50.005% interest in Deer Park Refining Limited Partnership. Shell Chemical LP will continue to operate its 100% owned Deer Park Chemicals facility located adjacent to the site.
- Deer park employees will be assigned to the assets of the refinery or chemical plant. Employees assigned to the assets of the refinery being divested will be offered employment by Pemex with effect at closing in accordance with the transaction, and employees assigned to the assets of the chemical plant not included in the divestment will continue. to work at Shell. Pemex will recognize the United Steel Workers and adopt the collective agreement.
- The Deer Park refinery has a crude oil capacity of 340,000 barrels per day. The refinery processes crudes from Mexico, Canada, United States, Africa and South America. Products produced by the refinery include gasoline, aviation fuels, diesel fuels, marine fuel and petroleum coke.
- The stock of hydrocarbons will be valued at closing based on actual volumes and prevailing market prices. The current value of the hydrocarbon inventory would be between $ 250 at $ 350 million in cash assuming current market prices and historical inventory volumes under normal operating conditions
- Deer Park Refining Limited Partnership is proportionately consolidated in Royal Dutch Shell plc’s International Financial Reporting Standards results.
- In our third quarter 2020 results, we presented the future of our chemicals and refining businesses. Shell plans to focus its refining portfolio on a smaller set of core sites that are integrated with Chemicals and Trading, which we call the Energy and Chemical Parks. These sites will maximize the benefits of integrating conventional fuels and chemical production while also offering new low carbon fuels and performance chemicals. They also offer potential future centers of sequestration.
- United States will remain a key global manufacturing center for Shell. Shell will maintain a significant presence in Texas thanks to its chemical plant Deer park and its activities in the Permian Basin, and in Louisiana thanks to its integrated refining and chemicals site at Norco, its chemical plant in Geismar, intermediate infrastructure assets, branded commercial presence, Gulf of Mexico operations and offices in Houston and New Orleans. Shell will also maintain its commercial presence and continue to honor branded wholesale agreements in the Gulf Coast region. In addition, Shell will continue to invest in its Pennsylvania chemicals project.
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