European oil and gas company Royal Dutch Shell confirmed on Thursday that the sale of its largest stake in a Texas refinery to Mexican state oil company Pemex has been delayed until next year.
Shell spokesman Curtis Smith said a review of the process by the Committee on Foreign Investment in the United States (CFIUS), a national security group chaired by the Treasury Department, was expected to end this month but has been extended until next year.
In May, Shell announced an agreement to sell its 50% stake in its 302,800 b/d Deer Park refinery in Texas, outside of Houston, to its partner Pemex for approximately $596 million. The authorities said the conclusion of the deal was expected this month.
“We were hoping to finish selling before the end of the month, but now it looks like it’s going to take all the time,” Smith said. “We will continue to cooperate with CFIUS as it reviews the deal,” he added.
Pemex did not immediately respond to a request for comment, but a source from the state-owned company said there was no delay because it was “legal” that it had until January 13, 2022 to obtain the authorization.
Once the CFIUS gives its approval, he added, it will be “a matter of days” to complete the process.
The delay indicates that CFIUS has passed the initial review period of 45 days and entered the second investigation period. The committee is tasked with reviewing sales of critical infrastructure to foreign buyers to determine the national security implications.
The second stage does not assume a possible rejection by the authority. Questions raised during the initial review can be resolved with a letter of agreement or mitigation agreement, according to a former CFIUS official who was not involved in the Pemex review.
Under the sale agreement, Shell will retain control of its wholly owned adjacent chemical plant, and will have only one refinery in the United States, the 230,611 barrels per day plant in Norco, Louisiana.
The purchase of Deer Park by Pemex, one of the world’s most indebted oil companies, is part of President Andres Manuel Lopez Obrador’s government’s plan to achieve the fuel self-sufficiency that Mexico requires.