<article><p class="lead">Shell will hand over full control of the 340,000 b/d Deer Park refinery in Texas to longtime joint venture partner Pemex next week, marking a step forward for Mexico's energy ambitions and another pivot in the Anglo-Dutch major's move away from North American oil-and-gas operations. </p><p>Pemex will assume full control of the refinery on 20 January, a union source told <i>Argus</i> today. Existing managers expect to remain in place at the facility after a move to Pemex payroll, according to comments from the facility's general manager late last year.</p><p>Shell announced the Deer Park <a href="https://direct.argusmedia.com/newsandanalysis/article/2218194">sale in May 2021</a>, with the Mexican state-owned Pemex set to buy Shell's 50.005pc stake for $596mn after holding a minority stake in the facility for the better part of 30 years. Besides the purchase price, Pemex expects to assume around $907mn in debt, interest and prepayment fees owed by Deer Park after the deal is concluded. The financial resources for the transaction will come from Mexico's national infrastructure fund.</p><p>Mexican president Andres Manuel Lopez Obrador has touted the deal as one more step towards securing "energy independence" for his country, arguing that the Deer Park refinery and the 340,000 b/d Olmeca refinery under construction in Dos Bocas, Tabasco, would combine to increase domestic supplies of refined products from this year. </p><p>Mexican energy minister Rocio Nahle stopped short of confirming the Deer Park handover date in an interview with Mexican media outlet Milenio Television yesterday but said officials are hopeful the transition will occur "very soon."</p><h3>Key to export-free plan</h3><p>The Deer Park refinery took on new significance in December when Pemex <a href="https://direct.argusmedia.com/newsandanalysis/article/2287202">presented a three-year plan</a> envisioning the end of crude exports by 2024. As part of that proposed export freeze, Pemex plans for Deer Park, Olmeca and its six existing refineries to fully take up around 2mn b/d of crude from 2024 — necessitating an increase in refining utilization rates from a current 44pc level to 86pc. </p><p>For Shell, the sale marks the end of nearly 100 years of ownership at the Deer Park refinery located about 20 miles southeast of Houston. The 2,300-acre facility was once seen as one of Shell's six "energy and chemicals parks" along with Norco, Louisiana, Scotford, Canada, and sites in the Netherlands, Singapore and Germany. But <a href="https://direct.argusmedia.com/newsandanalysis/article/2275826">pressure from shareholders and a mandate in May 2021 from a Dutch court</a> ordering the oil major to accelerate its net-zero strategy has served as a backdrop to a recent sell-off of fossil fuel assets. The company will retain control of Deer Park's chemicals facility and will continue providing emergency response services at the site after the sale is concluded. </p><p>Talks between Pemex and United Steelworkers (USW) Local 13-1 on a successorship agreement outlining worker benefits and other issues are "still ongoing" ahead of the 20 January transition, a source told <i>Argus</i> today. </p><p class="bylines">By Dylan Chase</p></article>
