Deer Park Refinery Achieves Record Profits

Since acquiring the Deer Park refinery over two years ago, PEMEX has seen record gains and profits – the highest in 16 years. Octavio Romero, Director General, PEMEX, emphasizes the refinery’s extraordinary results despite initial doubts about the purchase.

The Texas refinery was acquired in January 2022 for US$594 million. In its first year under PEMEX, Deer Park generated US$954 million in profits, covering the initial cost and adding US$350 million in benefits. In 2023, profits reached US$581 million and US$180 million in 1Q24.

Romero noted that the acquisition came when many expected a decline in oil demand and were selling refineries. PEMEX saw a strategic opportunity in Deer Park, he said. Since 2022, the refinery has significantly improved plant utilization, availability, and reduced unplanned shutdowns, crucial for PEMEX's turnaround. Deer Park ended 2022 debt-free and maintained this trend in 2023. In 1Q24, it processed an average of 256Mb/d, 21% of PEMEX's total 1.23MMb/d. This performance has been key to PEMEX’s historic profits, establishing Deer Park as a strategic asset.

PEMEX has long struggled with gasoline production, being the fuel it had to import the most. National refineries usually refine more fuel oil than any other types of derivatives, which presents a significant challenge due to its low value resulting from its high pollution levels. In line with the government's refining strategy, the NOC has begun scaling back oil exports, canceling contracts with refineries worldwide, while also aligning with OPEC's efforts to increase oil prices.

While President López Obrador's energy self-sufficiency strategy has faced delays, with the goal of halting fuel imports by 2023 initially pushed to 2024 and still unfulfilled, PEMEX data shows that refining increased from 511Mb/d by the end of 2018 to 1.23MMb/d in 1Q24 with a projection to reach 1.44MMb/d by the end of 2024. The increase in refining has been driven mostly by the maintenance of the SNR, and Deer Park’s output. By the end of 2024, out of the projected 1.44MMb/d, 273Mb/d come from Deer Park, 163Mb/d from the Olmeca Refinery and 1.00MMb/d from the SNR. PEMEX also highlighted the financial success of the purchase of the Deer Park refinery, whose investment was recovered approximately a year and a half after its purchase. Romero highlighted an increase in PEMEX's refining profits thanks to Deer Park, which are "among the highest in the last 16 years."