The Texas oil refinery that Petrolos Mexicanos is buying has hit a rare net loss of nearly $360 million this year, posing challenges to Mexico achieving energy independence.
Mexico’s state-owned oil company agreed in May to buy Royal Dutch Shell plc’s majority stake in Deer Park refinery. According to people with knowledge of the situation, it suffered until July due to the facility’s forced closure during the Texas freeze in mid-February. Deer Park has also struggled with market volatility during the pandemic, and its debt has exceeded $1 billion in recent months, said the people, who asked not to be named as they spoke to the media. were not authorized.
Pemex did not respond to a request for comment. Shell said it does not disclose the financial performance of individual assets. Pemex’s chief executive, Octavio Romero, said in May that Deer Park, a joint venture between Pemex and Shell, had traditionally made profits, although it suffered losses last year due to the pandemic. He said as of May it had a debt of $980 million.
Deer Park’s net loss this year — more than the $596 million that Pemex agreed to pay for Shell’s stake in the refinery — shows how the government’s strategy to address Mexico’s dependence on foreign energy That could put even more pressure on Pemex’s finances. After a decade and a half of declining oil production, its debt now exceeds that of any other oil company at more than $115 billion. Producers agreed in May to buy Shell’s 50.1% stake using federal funds as part of a government strategy to reduce Mexico’s dependence on foreign energy markets.
President Andres Manuel López Obrador came to power in late 2018 and promised to revive Pemex as an oil-producing powerhouse and restore Mexico’s fuel production. That policy includes building an $8.9 billion refinery known as Dos Bocas in the president’s home state of Tabasco, increasing production at Pemex’s existing six refineries, and the purchase of Deer Park.
Mexico’s Energy Minister Rocio Nahle has spearheaded the Dos Bocas project and commended Pemex’s purchase of Deere Park to promote the country’s energy independence goals. In a recent interview with Businesshala, Nahle said that Deer Park Refinery was profitable. “No, it’s not losing money”, she told the ministry’s office in Villahermosa, Tabasco. “Pemex conducted internal and external business analysis with an outside company and the results they presented are very good.”
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In June, the US Representative, Brian Babin, a Republican from Texas, published a letter to the Committee on Foreign Investment in the United States, opposing the deal because it claimed Pemex had no money to operate the deer. Does not have executive, managerial or technical expertise. Park the refinery safely.
Pemex is under international scrutiny after two offshore platforms caught fire over several months.
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