Shell, Pemex flag threats of Deer Park sale delay
Shell and Pemex have nearly finalised the $596m deal to hand over control of the 340,000 b/d Deer Park, Texas, refinery to Mexico’s oil firm, but a legal challenge seeking to stop the deal could present new hurdles.
Pemex’s bid to purchase the 50.005 percent it does not already own in the refinery was announced in May. It would allow Shell to maintain control of the onsite chemicals plant at Deer Park, a 2,300-acre facility near Houston.
The companies are about 90 percent finished with work separating operations between the refinery and the chemical plant, as part of a $30m transition plan steered by Shell, the company said in testimony submitted in the US District Court for the Southern District of Texas in January.
Pemex’s plan to purchase control of Deer Park faced scrutiny from US lawmakers and regulators throughout 2021, drawing fierce opposition from a local congressman and a months-long review from the Committee on Foreign Investment in the US that caused the companies to miss an initial fourth quarter 2021 target to wrap the deal.
A legal complaint from a group of New York-based laundromat owners marks the latest challenge. Aaron Hagele and Andrew Sarcinella, owners of a laundromat in Mt Vernon, New York, filed a lawsuit in December seeking to stop the sale based on the argument that it will reduce competition in the US gasoline market, leading to higher prices for retail consumers and business owners across the country. The plaintiffs are seeking a legal enjoinder that would restrain the companies from completing the deal over antitrust concerns.
If they succeed in convincing a Houston judge that the sale would violate antitrust laws, Shell and Pemex will face financial, operational and labour-related headaches in coming weeks and months, Shell deal implementation leader Kristen Bergeron said in testimony submitted in the case.
“Should closing be delayed, Shell will be required to spend additional money to maintain systems stuck in limbo and will likely also have to repeat work that has already been done in anticipation of closing,” Bergeron said.
For more information visit www.shell.com
17th January 2022