By Erwin Seba
HOUSTON (Reuters) - A U.S. national security review has delayed the sale of Royal Dutch Shell's controlling interest in a Texas refinery to Mexico's national oil company, Petroleos Mexicanos (Pemex), Shell said on Tuesday.
Shell in May disclosed an agreement to sell its 50% interest in the 302,800-barrel-per-day (bpd) Deer Park, Texas, refinery outside Houston to partner Pemex for about $596 million. The closing was expected as early as Wednesday.
Approval by the Committee on Foreign Investment in the United States (CFIUS) is the last hurdle to the transfer of full control of the Texas refinery to Pemex, said people familiar with the matter.
"While we were hopeful we could conclude the sale of the Deer Park refinery earlier in the CFIUS review process, we're still targeting late 2021 as a closing date for the transfer of Shell's interest in the refinery," Shell spokesperson Curtis Smith said.
A spokesperson for CFIUS declined to comment.
One person close to Pemex said CFIUS approval could happen in mid-December.
A person who works at Deer Park said, however, there is no certain closing date. "Could be next week. Could be early next year," the person said.
U.S. Representative Brian Babin, a Republican representing southeast Texas, called on Tuesday for the U.S. government to block the sale, saying "Pemex lacks the technical expertise, safety record, and business practices needed to operate a facility of such scale in the United States."
"Allowing a foreign company run by an administration that is hostile toward American energy producers access to our critical infrastructure endangers my constituents and threatens our national security," Babin said in a statement.
Babin has openly criticized the sale since June, when he requested a review by the U.S. Treasury and Energy departments.
Under the sale agreement announced in May, Shell would retain control of the Deer Park facility's chemical plant and the company will have only one refinery in the United States, the 230,611-bpd plant in Norco, Louisiana.
(Reporting by Erwin Seba; Additional reporting by Alexandra Alper in Washington and Adriana Barrera and Stefanie Eschenbacher in Mexico City; Editing by David Evans and Peter Cooney)