We already have the money to close the purchase of the Deer Park refinery in January: AMLO

President Andrés Manuel López Obrador He assured that in January 2022 the sale of the Deer Park refinery, located in Texas, will be completed and that the Mexican government acquired the oil company Shell through Pemex.

“It has already been agreed, how it is authorized, to pay it in January and we have the resource to do it (…) This operation has already been completed, it remains to be paid, but we already have the money,” said the president this morning.

The Mexican president’s comments led to his morning conference on Monday after it was made public that the institutions Banorte, Barclays and SMBC had granted a bridge loan valued at 500 million dollars so that Pemex could finance the purchase of Deer Park.

“The Treasury would choose to pay in the time it was contracted, it all depends. I can say that it is liquidated in January, the operation is closed in January ”, said López Obrador.

Pemex has reported that the purchase price of the refinery with a processing capacity of 340,000 barrels of crude per day was 596 million dollars. However, that amount only included Shell’s share of the joint venture’s debt with Pemex’s commercial arm, PMI, in which both partners had a 50% stake, and not the total debt of the refinery.

The purchase of 49.005% of the Deer Park refinery also has the objective of increasing the sale of Pemex fuels, although it should be remembered that by locating in Houston, the national distribution will incur customs and logistics costs typical of imports, even if it is from the same company, in addition to being regulated by US competition authorities in a market in which it could be more profitable to sell the products that are refined than to bring them to Mexico for commercialization.

Deer Park refinery in depth

• In 1993, Pemex acquired its stake in the refinery located in Houston, Texas, and partnered with Shell Oil Company.
• The refinery is designed to process heavy Mayan crude with up to 22 degrees API and high sulfur content.
• The Deer Park refinery has a crude processing capacity of 340,000 barrels per day and its plants allow it to process heavy and light crude without generating fuel oil.
• It produces around 110,000 barrels per day of gasoline, 90 million barrels of diesel, and 25 million barrels per day of jet fuel.
• It has been characterized by a utilization of over 80% of its capacity in recent years.
• Pemex currently holds 49.995% through its subsidiary PMI North America.
• After the gains of 872,885 million pesos in 2018, Pemex lost 1,438 million in 2019 and 4,056 million pesos in this refinery in 2020.