Business Strategy Shell to Sell Stake in Deer Park Refinery
Shell has plans to sell its interest in Deer Park Refining Ltd Partnership, a 50:50 joint venture firm between Shell and Pemex, to Pemex for 596 million dollars. Once the deal is finalized, Pemex will solely own the company.
The Hague/Netherlands – Shell Oil Company, a subsidiary of Royal Dutch Shell, has reached an agreement for the sale of its interest in Deer Park Refining Ltd Partnership, a 50-50 joint venture between Shell Oil Company and P.M.I. Norteamerica (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.
“Shell did not plan to market its interest in the Deer Park refinery; however, following an unsolicited offer from Pemex, we have reached an agreement to transfer our interest in the partnership to them,” said Huibert Vigeveno, Shell’s Downstream Director.
“Pemex has been our strong and active partner at the Deer Park Refinery for nearly 30 years, and we will continue to work with them in an integrated way, including through our on-site chemicals facility, which Shell will retain. Above all, we remain committed to the wellbeing of our employees and will work closely with Pemex to ensure the continued prioritization of safe operations. We’re proud of our 90-plus year history as an operator and neighbor at Deer Park and we will continue to play an active role in the community”.
The consideration for this transaction is 596 million dollars which is a combination of cash and debt, plus the value of hydrocarbon inventory. This transaction allows Shell to further focus on 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.