The United States has endorsed the acquisition of the Deer Park refinery, located in Houston (Texas), by the state company Petróleos Mexicanos (Pemex), as announced by the federal government on Wednesday. If the deal is completed, the refinery, which is currently jointly owned by Pemex and the Anglo-Dutch Shell, would go completely into the hands of the Mexican company. The transaction is part of the strategy of the president, Andrés Manuel López Obrador, to prioritize the refining of gasoline to reduce the importation of large quantities of fuels from abroad.
The CEO of Pemex, Octavio Romero Oropeza, explained in the morning press conference that Shell has a majority ownership of 50.005%, which allowed it to make operational decisions. “That implied that for several years, although dividends and profits were distributed, in the end it was decided that they would be reinvested in the same refinery and Pemex did not obtain any benefit,” argued the manager. “This operation, which is now authorized, and which will be carried out in the next few days, is of the greatest relevance because now Pemex, and the country rather, owns the Deer Park refinery and that will allow all fuels, gasoline, diesel, jet fuel, are owned by the people of Mexico to satisfy the energy self-sufficiency program ”.
The Government of Mexico assures that the estimated amount of the purchase is almost 600 million dollars. In addition, Romero Oropeza reported, Deer Park has a debt of 596 million dollars which Mexico will liquidate. However, a report by the Bloomberg agency published this month ensures that the total amount will be 1.6 billion. The purchase goes against the trend among the largest oil companies worldwide to migrate to renewable energies and redesign their business model in such a way as to alleviate dependence on fossil fuels.
“This means having more capacity to process crude oil, the raw material, which is extracted from the wells of our country,” said López Obrador in the National Palace. He has also indicated that 10,000 million pesos are being invested to rehabilitate the six existing refineries. “We are increasing our refining capacity by around 700,000 barrels per day,” he said.
It was the Committee on Foreign Investments in the US (CFIUS), who authorized the purchase, reported the Secretary of Foreign Relations, Marcelo Ebrard. The Committee is a group of the United States Government dependent on the Department of the Treasury and which brings together all the competent agencies in matters of foreign investment and national security. “It shows a very good relationship between Mexico and the United States,” said Ebrard, “there is mutual trust and respect and this decision ratifies it.”
Deer Park, located in Houston, was founded in 1992 in a joint venture between Pemex and Shell. Since 2004, the refinery has lost lawsuits against it by environmentalists, has paid fines for polluting the air and even for a spill of carcinogenic chemicals. In 2019, a non-governmental research center found that Deer Park exceeded legal limits for emissions of benzene, a carcinogenic chemical, into the air.
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George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.