Pemex to Buy Shell Refinery Stake in Bid for Self-Sufficiency

(Bloomberg) -- Petroleos Mexicanos will take full control of the Houston-area refinery it shares with Royal Dutch Shell Plc as the Mexican state oil company seeks to expand production of fuels for its domestic market.

Pemex, as the state-owned Mexican explorer is known, has agreed to buy Shell’s 50% stake in the refinery in the Houston suburb of Deer Park for $596 million, according to a statement on Monday. Shell plans to retain control of an adjacent chemical plant.

Shell said it hadn’t sought buyers for the refining stake and that the transaction resulted from an unsolicited bid on the part of Pemex. The deal is scheduled to close during the fourth quarter and will be fully financed by the Mexican government, Pemex said.

“This decision is part of Pemex’s new business policy, proposed by the president of Mexico, which consists of achieving in the short term the production of all the fuels that the country requires,” Pemex said.

Mexican President Andres Manuel Lopez Obrador, known as AMLO, has placed Pemex at the heart of plans to achieve energy self-sufficiency and reverse three decades of what he calls neo-liberal economic policies. He blames market-friendly predecessors for weakening Pemex and ransacking Mexico’s oil riches.

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