US clears Deer Park refinery purchase: Update

Adds union confirmation

The US government has authorized the purchase of the 340,000 b/d Deer Park refinery in Houston, Texas, Mexico's government and union sources said today.

In his daily press conference President Andres Manuel Lopez Obrador said the purchase of Shell's 50.005pc stake in the joint venture with state-owned Pemex gained US government authorization on 21 December.

But the final details of the deal and signing of the agreement are still expected to take place in the early days of January, as Shell announced previously, Pemex chief executive Octavio Romero said at the same event.

Following the deal, refined products from the Deer Park refinery will come directly to Mexico, "a new great perk, that did not happen before when most of the revenue of the refinery was reinvested and there was no benefit for Mexico," Romero said.

Shell announced the Deer Park sale in May, with Pemex set to buy Shell's majority stake for $596mn after holding a minority stake in the facility for the better part of 30 years.

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 starting next year.

The US Committee on Foreign Investment in the United States (CFIUS) approved the transaction, Marcelo Ebrard, ministry of foreign relations, said this morning.

"This was notified by the US Department of the Treasury," Ebrard said. "This also signals the very good relationship between Mexico and the US."

Managers at Deer Park announced the deal's clearance by CFIUS to workers at the facility this week, a source from the United Steelworkers (USW) Local 13-1 union told Argus. USW representatives continue to negotiate with Pemex on a successorship agreement outlining how worker benefits and other concerns will be handled following the deal's closing.

The US Department of the Treasury did not respond to a request for comment.

By Sergio Meana and Dylan Chase