MOSCOW (MRC) -- The Deer Park refinery sale to the Mexican state-owned company Petroleos Mexicanos (Pemex) has been approved by the US government, according to EnergyCapital with reference to president Andres Manuel Lopez Obrador' statement this Wednesday.
Firstly, as we have reported previously, the sale was a matter of dispute. Some US Congressman considered selling Shell’s Deer Park refinery to Pemex threatened US national security.
Moreover, the transaction had a value of $596 million, in a combination of debt and cash; plus, the value of hydrocarbon inventory. The transaction would allow Shell to focus its refining footprint further; while also maintaining integration optionality and retaining value through its Chemicals and Trading activities.
On the other hand, the acquisition has a political value for Mexico. President Andres Manuel Lopez Obrador pledged to drive the country to energy self-sufficiency by 2023. Indeed, Mexico has a deep dependence on foreign fuel imports. It buys around 70% of its fuel consumption from abroad.
Furthermore, back in late November, the Committee on Foreign Investment in the United States (CFIUS) denied the final approval for the sale. However, on Wednesday morning, the Mexican government said the CFIUS had finally approved the transaction.
In addition, Pemex Chief Executive Officer Octavio Romero, speaking alongside president Obrador, said that it was excellent news. He also remarked. “The idea is to finalize the purchase during the first weeks of 2022.”
As MRC informed previously, Royal Dutch Shell plc. said in November that its petrochemical complex of several billion dollars in Western Pennsylvania is about 70% complete and in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.
Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,047,100 tonnes in the first ten months of 2021, up by 17% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,226,530 tonnes in January-October 2021, up by 26% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding stat-copolymers of propylene (PP random copolymers) decreased significantly.
Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC