UPDATE 1-Mexican state-owned Pemex will receive keys to Deer Park on January 20: sources

(Updated with statements from the Secretary of Energy)

MEXICO CITY, Jan 13 (Reuters) – The oil company Pemex will take control of the Deer Park refinery, located in Texas, on January 20, when the agreement by which the Anglo-Dutch company Royal Dutch Shell is selling its half of the plant to the Mexican state giant, said several sources familiar with the matter.

In May of last year, President Andrés Manuel López Obrador surprisingly announced that Pemex, which carries heavy liabilities and recurring losses, agreed to buy Shell its 50% stake in the refinery for nearly $600 million, following an unsolicited offer.

“Next Thursday the payment and the transfer of the property will be made,” a source at the Mexican firm familiar with the matter told Reuters, requesting anonymity because they were not authorized to speak on the matter. “The refinery will already be operated directly by Pemex.”

The Secretary of Energy, Rocío Nahle, declined to confirm the date and said that Pemex and Shell are keeping “the times” of the operation.

“Hopefully it will be soon,” he responded to an express question in an interview on Mileno TV at night about whether Pemex will take control of Deer Park on January 20.

The Pemex source added that the oil company reached a labor agreement with the staff that was already operating the refinery, which has a capacity to process 340,000 barrels per day (bpd).

“The operators will be the same, but it will no longer be Shell personnel (…) This guarantees the stability of the operation,” he said.

Another company source said a Pemex commission, including CEO Octavio Romero, will go to Texas for the final signing next Thursday.

Pemex did not immediately respond to a request for comment. Shell’s spokesman could not immediately confirm the delivery date.

Another source close to the talks said there are still final transition activities pending, expected to be completed in the coming days. He added that conversions have been accelerated in recent days in order to complete the entire purchase operation before February 1.

Neither Shell nor Pemex have revealed details regarding what volumes of refined products Mexico will receive from the plant in Texas, nor how much crude it will be able to supply in the future.

López Obrador has said that with control of Deer Park and the Olmeca refinery, better known as Dos Bocas, Mexico will be able to achieve energy self-sufficiency because it will stop importing fuels and exporting crude oil by 2024, without explaining how the country will offset those revenues for foreign sales.

Pemex’s six refineries in Mexico are processing around 700,000 bpd on average, well below their combined capacity of 1.5 million bpd. (By Ana Isabel Martínez. Additional reporting by Dave Graham and Adriana Barrera in Mexico City and by Gary McWilliams in Houston. Editing by Marianna Párraga)


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