MOSCOW (MRC) -- Moody's Investors Service has downgraded Deer Park Refining Limited Partnership to "Baa3" from "Baa2", the rating agency said, while placing the stock on review for a further downgrade, reported Reuters.
The decision comes after Shell Oil Co, a subsidiary of Royal Dutch Shell Plc, agreed to sell its controlling interest in Deer Park Refining to partner Mexican state oil company Petroleos Mexicanos, or Pemex.
This makes Deer Park Refining, a Texas-based facility, the first foreign refinery that Pemex will own solely in its history. The Mexican company said it plans to control and run the refinery after the deal is settled by late this year.
"The review for downgrade of the Baa3 ratings further reflects Moody's expectation that following the sale, Deer Park ratings will be driven predominantly by its standalone credit dynamics and the much-weaker credit profile of Pemex," the agency said in a statement.
"The Baa3 rating still benefits from a multi-notch rating uplift, which is primarily linked to Shell and also factors in several credit-enhancing arrangements, including shareholder loans and liquidity support arrangements, committed by both Shell and Pemex."
As MRC informed before, Shell is shrinking its refining and chemicals portfolio as part of a broader shift by oil majors to reduce hydrocarbon emissions and shift to lower-carbon fuels.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
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