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SHELL, PEMEX SIGN MEMORANDUM OF UNDERSTANDING FOR U.S. REFINING JOINT VENTURE

 SHELL, PEMEX SIGN MEMORANDUM OF UNDERSTANDING
 FOR U.S. REFINING JOINT VENTURE
 HOUSTON, Aug. 26 /PRNewswire/ -- Petroleos Mexicanos (Pemex) and Shell Oil Company said today they have signed a memorandum of understanding to pursue the formation of a joint refining venture involving Shell's 225,000 barrels-per-day fuels refinery at its Deer Park, Tex., manufacturing complex. As part of the agreement, Pemex would purchase 50 percent of the fuels refining facilities, Pemex would provide the refinery with a long-term supply of crude oil, and Shell would sell Pemex unleaded gasoline on a long-term basis to help satisfy growing demand in Mexico. Detailed agreements and government filings, necessary for venture formation, are expected to be completed by year end.
 With this venture, Shell and Pemex envision the addition of new refinery conversion and upgrading facilities specifically designed to process heavy Mexican crude. This will allow Pemex to place, in the U.S. market, more than 100,000 barrels a day of Mayan crude. Maya is a heavy crude which represents 70 percent of Mexico's oil exports. Shell will sell Pemex up to 45,000 barrels a day of gasoline for the Mexican market. The refinery upgrading also will allow Shell to meet the needs for reformulated gasoline production required by the Clean Air Act.
 Pemex Director General Francisco Rojas said that the proposed venture is important to his company's competitiveness and vitality. "This venture between Pemex and Shell reinforces Pemex's position both as an exporter of crude oil and as a reliable and cost-effective supplier of gasoline for Mexico," he said. "The investment in one of the U.S. industry's major oil refineries offers the potential for Pemex to reap a strong return on its investment in the near term without affecting its plans for other refining investments within Mexico," Rojas added.
 "Both Pemex and Shell have recognized the synergy and strong mutual benefit that can result through this refining venture," said Shell President and CEO Frank H. Richardson. "In view of the difficult economic climate facing the oil industry today, the partnership will strengthen the competitiveness of the Deer Park refinery, which is a key element of Shell's long-range strategic plans," he added.
 "The proposed venture offers an excellent opportunity for Shell, its employees, and the Deer Park community," Richardson said. "In operating the refinery we will maintain the same commitment we have always had to the health and safety of our employees, to the community and to the environment."
 Shell Oil Company, headquartered in Houston, operates six refineries in Texas, Louisiana, Illinois, California and Washington. Located on the Houston Ship Channel about 20 miles east of Houston, Shell's Deer Park operation is the company's largest integrated refining-chemical manufacturing complex, covering nearly 1,500 acres.
 Petroleos Mexicanos, headquartered in Mexico City, was established in 1938. As Mexico's state oil company, Pemex's principal corporate objectives are the exploration, production, refining and distribution of crude oil and petroleum derivatives. In terms of both capital base and total assets (US $45 billion), Pemex is one of the largest industrial concerns in the world.
 -0- 8/26/92
 /CONTACT: Holly Hutchins, 713-241-4544, Eydie Pengelly, 713-241-4544, Dennis Winkler, 713-246-6151, Mike Sternesky, 212-632-4888, all of Shell Oil, or Marta Avelar of Pemex (in Mexico City), 011-525-250-7271/ CO: Shell Oil Company; Petroleos Mexicanos ST: Texas IN: OIL SU: JVN


MA -- NY029 -- 3440 08/26/92 11:52 EDT
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Publication:PR Newswire
Date:Aug 26, 1992
Words:560
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